Diageo plc

LSE:DGE Stock Report

Market Cap: UK£33.5b

Diageo Valuation

Is DGE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Future Cash Flow Value

  • Significantly Below Future Cash Flow Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Future Cash Flow Value

What is the Fair Price of DGE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Ultimate guide to DCF valuation for stock investing

Learn how to determine fair value like the best investors in the world.

Below Future Cash Flow Value: DGE (£15.09) is trading below our estimate of future cash flow value (£29.87)

Significantly Below Future Cash Flow Value: DGE is trading below future cash flow value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DGE?

Key metric: As DGE is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for DGE. This is calculated by dividing DGE's market cap by their current earnings.
What is DGE's PE Ratio?
PE Ratio18.6x
EarningsUS$2.41b
Market CapUS$44.88b

Price to Earnings Ratio vs Peers

How does DGE's PE Ratio compare to its peers?

The above table shows the PE ratio for DGE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average40.3x
CCR C&C Group
115.3x36.82%UK£348.1m
CCH Coca-Cola HBC
19.8x10.19%UK£16.1b
IMB Imperial Brands
12.2x7.01%UK£21.2b
ABF Associated British Foods
13.9x8.74%UK£13.2b
DGE Diageo
18.6x11.20%UK£33.5b

Price-To-Earnings vs Peers: DGE is good value based on its Price-To-Earnings Ratio (18.6x) compared to the peer average (40.3x).

Historical Price to Earnings Ratio

Historical Price to Earnings Ratio compares a stock's price to its earnings over time. Higher ratios indicate that investors are willing to pay more for the stock.

Fetching historical data

Price to Earnings Ratio vs Industry

How does DGE's PE Ratio compare vs other companies in the European Beverage Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
DGE 18.6xIndustry Avg. 17.0xNo. of Companies10PE01020304050+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DGE is expensive based on its Price-To-Earnings Ratio (18.6x) compared to the European Beverage industry average (17x).

Price to Earnings Ratio vs Fair Ratio

What is DGE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DGE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.6x
Fair PE Ratio22.3x

Price-To-Earnings vs Fair Ratio: DGE is good value based on its Price-To-Earnings Ratio (18.6x) compared to the estimated Fair Price-To-Earnings Ratio (22.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst DGE forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£15.09
UK£19.55
+29.60%
14.59%UK£24.42UK£14.06n/a22
Jun ’27UK£14.90
UK£19.47
+30.73%
14.03%UK£24.27UK£14.85n/a22
May ’27UK£14.81
UK£19.30
+30.36%
14.72%UK£24.09UK£14.41n/a22
Apr ’27UK£13.95
UK£19.76
+41.64%
14.00%UK£24.38UK£14.59n/a22
Mar ’27UK£16.63
UK£20.20
+21.51%
14.03%UK£26.19UK£15.04n/a22
Feb ’27UK£16.76
UK£20.60
+22.96%
15.99%UK£26.63UK£14.69n/a22
Jan ’27UK£16.04
UK£20.77
+29.52%
13.80%UK£26.33UK£15.18n/a21
Dec ’26UK£17.48
UK£21.65
+23.89%
14.29%UK£26.85UK£15.85n/a21
Nov ’26UK£17.50
UK£23.35
+33.44%
13.15%UK£27.63UK£17.00n/a21
Oct ’26UK£17.90
UK£23.36
+30.52%
12.44%UK£27.33UK£17.18n/a21
Sep ’26UK£20.40
UK£23.28
+14.11%
11.82%UK£27.04UK£17.02n/a22
Aug ’26UK£18.22
UK£24.23
+32.99%
12.99%UK£28.80UK£16.58n/a22
Jul ’26UK£18.97
UK£24.05
+26.83%
12.04%UK£27.64UK£16.91n/a23
Jun ’26UK£20.17
UK£24.49
+21.39%
12.42%UK£29.56UK£17.20UK£14.9023
May ’26UK£20.98
UK£24.11
+14.91%
12.63%UK£29.04UK£18.50UK£14.8123
Apr ’26UK£20.23
UK£25.33
+25.20%
12.44%UK£30.11UK£19.57UK£13.9522
Mar ’26UK£21.63
UK£25.80
+19.29%
12.09%UK£30.75UK£19.98UK£16.6322
Feb ’26UK£24.19
UK£26.64
+10.12%
10.76%UK£31.22UK£20.40UK£16.7622
Jan ’26UK£25.38
UK£27.21
+7.23%
11.37%UK£31.33UK£20.03UK£16.0422
Dec ’25UK£23.53
UK£26.46
+12.46%
11.34%UK£30.74UK£20.51UK£17.4822
Nov ’25UK£23.96
UK£26.92
+12.37%
13.04%UK£33.29UK£20.28UK£17.5022
Oct ’25UK£26.16
UK£26.01
-0.54%
12.94%UK£32.10UK£19.55UK£17.9022
Sep ’25UK£24.73
UK£26.10
+5.57%
14.05%UK£33.50UK£19.42UK£20.4022
Aug ’25UK£24.00
UK£27.61
+15.03%
15.10%UK£34.73UK£20.13UK£18.2222
Jul ’25UK£24.80
UK£29.50
+18.95%
11.62%UK£35.09UK£23.06UK£18.9722
Jun ’25UK£26.31
UK£29.90
+13.67%
12.41%UK£35.67UK£23.23UK£20.1722
UK£19.55
Fair Value
22.8% undervalued intrinsic discount
22
Number of Analysts

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2026/06/09 03:37
End of Day Share Price 2026/06/09 00:00
Earnings2025/12/31
Annual Earnings2025/06/30

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Diageo plc is covered by 47 analysts. 20 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
John StaszakArgus Research Company
Barry CoppelBanco Santander
Alexandra OldroydBarclays