DEO Stock Analysis: Buy, Sell, or Hold?
DEO - Diageo plc
$83.78
2.09 (2.56%)
▲
5d:
+2.16%
30d:
+2.32%
90d:
-13.14%
BUY
HIGH Confidence
Analysis Updated: May 18, 2026 12:00 AM ET
Earnings: Jun 03, 2026
15d
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Interactive Price Chart (1 Month)
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Bottom Line:
✅ BUY SIGNAL: DEO shows strong fundamentals and good volume confirmation. Solid entry point despite fair pricing.
✅ BUY SIGNAL: DEO shows strong fundamentals and good volume confirmation. Solid entry point despite fair pricing.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$10.12
Based on -30.0% avg growth
INTRINSIC VALUE TODAY
$6.28
Trading above historical range
How this is calculated: We use a Growth Decay Model: starting with analyst consensus growth (adjusted above) and gradually slowing it down to a long-term terminal rate (4%) by Year 5. This provides a more realistic valuation than assuming constant hyper-growth. We then apply a 12.9x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: DEO is currently trading at $83.78, which is considered fair relative to its 30-day fair value range of $77.56 to $82.24. The stock's valuation (Forward PE: 12.7) is in line with its historical norms (12.9). Remarkably, the market is currently pricing in an annual earnings decline of 0.7% over the next few years. This pessimistic expectation contrasts with the company's recent 2.9% earnings growth, suggesting potential undervaluation if the company simply maintains stability.
Technical Outlook: Technically, DEO is in a downtrend. The price is approaching resistance at $85.50. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: DEO has a strong technical setup (75/100), with favorable trendlines, momentum, and price action for short-term traders. Wall Street analysts see significant upside, with an average price target of $101.29 (+24.0%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Technical Outlook: Technically, DEO is in a downtrend. The price is approaching resistance at $85.50. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: DEO has a strong technical setup (75/100), with favorable trendlines, momentum, and price action for short-term traders. Wall Street analysts see significant upside, with an average price target of $101.29 (+24.0%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Quick Decision Summary
Current Position
FAIR
Historical Trading Range
$77.56 -
$82.24
Company Quality Score
59/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
83.3%
All Signals
- NEUTRAL: Price in fair range
- BULLISH: Strong technical setup (75/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 24.0% below Wall St target ($101.29)
Trading Range Analysis
30-Day Trading Range
$77.56 -
$82.24
Current vs Trading Range
FAIR
Support & Resistance Levels
Support Level
$78.85
Resistance Level
$85.50
Current Trend
Downtrend
Technical data as of
May 18, 2026
Fundamental Context
Forward P/E (Next Year Est.)
12.65
Wall Street Target
$101.29
(+24.0%)
Revenue Growth (YoY)
-4.0%
Earnings Growth (YoY)
2.9%
Profit Margin
12.2%
Valuation Discount vs History
-0.7% cheaper
PE vs Historical
12.7 vs 12.9
FAIR
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-0.7%
(market-implied from PE analysis)
1-Year Target
$81.12
(-1%)
2-Year Target
$80.55
(-1%)
3-Year Target
$79.99
(-2%)
3-Yr Target (if PE normalizes)
(PE: 13→13)
$81.54
(0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 22.1, Growth: -63.9%)
$139.76
(+71%)
Base:
(SPY PE: 12.7, Growth: -63.9%)
$80.13
(-2%)
Bear:
(PE: 10.8, Growth: -63.9%)
$68.11
(-17%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (19x PE), but valuation improves significantly next year (13x PE) as earnings recover.
Trailing PE: 18.87 | Current EPS (TTM): $4.33
Bull Case
$134.00
(+64%)
Analyst growth 49.1%, PE expands to 20.8
Base Case
$121.82
(+49%)
Market implied 49.1%, PE stable at 18.9
Bear Case
$55.56
(-32%)
Severe decline -20.0%, PE contracts to 16.0
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
💡
Upside Surprise Potential
If earnings stabilize (0% growth), PE could expand from 12.7 to 12.9
Stabilization Target:
$83.27
(+1.9%)
PE Expansion Potential:
+1.9%
Share & Embed Analysis
Last updated: May 18, 2026 4:34 PM ET
Data refreshes hourly during market hours. Next update: 5:34 PM
Data refreshes hourly during market hours. Next update: 5:34 PM
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Technical Signals Check
Is DEO showing a specific setup today?
Insider Activity (6 Months)
0
Buys
0
Sells
0
Net
NEUTRAL
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