World: Diageo expected to report another slide in earnings later this month

Guinness owner Diageo PLC is expected to report another slide in earnings in its full-year results later this month, with analysts expecting it to lower mid-term guidance as a result, Proactive Investors reported on July 15.

Ahead of the update on July 30, analysts at Deutsche Bank warned organic sales in the second half may drop by 2%, compared to market consensus of a 0.9% rise.

The Smirnoff and Captain Morgan maker is also expected to suffer a 2.8% fall in organic operating profits, according to the German bank.

“For the full-year, we expect organic operating profit growth of -4.4%, adjusted operating profit of $5,926mn and adjusted net profit of $3,994mn,” analysts said in their latest report.

Forward-looking guidance is expected to be minimal due to the “ongoing headwinds and limited visibility in the US”.

Current targets for 5%-7% organic revenue growth over the medium term are expected to be scrapped by management in the July announcement.

In 2025, Deutsche Bank is expecting revenues to lift by 4.4%, while organic operating profits is predicted to rise by 4.8%.

Deutsche Bank maintained its sell rating for the drinks group and placed a 2,300p target price on the stock, marking a discount to the 2,519p it traded on July 15 at.

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