Top 5 Consumer Defensive Stocks to Buy Now

2. Diageo plc (NYSE:DEO)

Stock Upside Potential: 39.45%

Number of Hedge Fund Holders: 30

Diageo plc (NYSE:DEO) is one of the top consumer defensive stocks to buy now. On March 31, Deutsche Bank upgraded Diageo plc (NYSE:DEO) to a Buy from a Hold but cut the price target to £1650 from £1790.

The price target cut coincided with a reset of the company’s profitability prospects. According to the research firm, the company’s profitability is expected to be 11% below consensus in 2027 and 10% below consensus estimates in Fiscal 2028.

According to Deutsche Bank, the British alcoholic beverage company is facing industry headwinds that are likely to affect its performance in the future. In addition, the company is facing market-share loss, which is expected to affect its profitability metrics. Consequently, Diageo could incur a 600 basis-point reduction in EBIT margins in North America and a 200 basis-point reduction in Europe.

One way out of the current stagnation is for the company to invest in price, marketing, and route-to-market. According to the investment bank, such investments could result in 3% to 4% organic sales growth and 5% to 7% organic operating profit growth in FY28.

Diageo plc (NYSE:DEO) is a world-leading producer of premium alcoholic beverages, operating as a top alcohol company with over 200 brands sold in nearly 180 countries. They produce and distribute iconic brands, including Johnnie Walker, Guinness, Smirnoff, Tanqueray, and Baileys, spanning Scotch whisky, beer, tequila, and gin.