Diageo plc (DEO) Gets Downgraded to Hold From Buy – Here’s Why

Diageo plc (NYSE:DEO) is one of the best undervalued defensive stocks for 2026. On March 2, Diageo plc (NYSE:DEO) was downgraded to Hold from Buy, with the firm setting a price target of 1,800 GBp. The firm attributed the downgrade to uncertainty over when the company’s U.S. volumes will bottom. It further told investors in a research note that Diageo plc (NYSE:DEO) lowered its fiscal 2026 guidance to reflect factors such as challenges in Chinese white spirits, a weaker-than-expected U.S. spirits category, and a weaker consumer in China.

Morgan Stanley Cuts Target on Diageo (DEO) as Growth Pressures Persist

The company’s 2026 interim results for the six months ended 31 December 2025, showed reported net sales of $10.5 billion, which declined 4.0% due to organic net sales decline and the negative impact of disposals. Diageo plc (NYSE:DEO) also reported that organic net sales declined 2.8%, driven primarily by organic volume down 0.9% and negative price/mix of 1.9%. In addition, strong organic net sales growth in Europe, Latin America and Caribbean (LAC), and Africa was more than offset by softer performance in North America.

Diageo plc (NYSE:DEO) is involved in the production and distribution of alcoholic beverages. Its brands include Johnnie Walker, Crown Royal, J&B and Buchanan’s whiskies, Smirnoff, Ciroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Casamigos, Tanqueray, and Guinness. The company’s operations are divided into the following geographical segments: North America, Europe, Asia Pacific, Latin America and Caribbean, Africa, and Corporate and Other.

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