UBS has reiterated its share rating for Diageo after the drinks giant issued its first quarter update. The Swiss broker yesterday (19 October) reiterated its 'buy' recommendation and 960 pence price target for Diageo.

Quarter one trading was consistent with previous guidance, UBS said, and it is keeping its full-year pre-tax profit forecast for the current year unchanged at GBP2.068bn, compared with GBP2.003bn last year.

The broker also noted that Diageo is gaining share in the US, with margins expected to expand due to price increases. However, it said Europe continues to struggle with first-quarter volumes down.

Earlier yesterday, Diageo said that market conditions in Europe remain difficult, although pointed out that quarter one trading is in line with expectations.