Diageo has had its price target raised. Lehman Brothers investment bank yesterday upped its target for the drinks group to 780 pence from 760p.

The bank forecast that Diageo will sell its stake in US cereal maker General Mills during the fourth quarter to raise funds for the company's share buyback programme. Lehman expects the sale to raise around £600m (US$1.10 billion).

Speaking to Reuters, Lehman analyst David Hayes said: "There has been weakness in the stock price because the buyback was suspended, but they can re-initiate that after the results, so that will add support." Diageo's last foray into its share buyback programme was on 19 December last year.

Last week, ABN AMRO raised its price target for Diageo to 800 pence per share from 675p.