Diageo's turnaround plans could help stock rerating, says leading US bank

What Brokers Say Retail & Consumer Written by: Ian Lyall 08:03 Mon 21 Sep 2026 --> Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Ian Lyall Ian Lyall, a seasoned journalist and editor, brings over three decades of experience to his role as Managing Editor at Proactive. Overseeing Proactive's editorial and broadcast operations across six offices on three continents, Ian is responsible for quality control, editorial policy, and content production. He directs the creation of 50,000 pieces of real-time news, feature articles, and filmed interviews annually. Prior to Proactive, Ian helped lead the business output at the Daily... Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. Diageo PLC ( LSE:DGE ) View Price & Profile Diageo's turnaround plans could help stock rerating, says leading US bank Published: 08:03 21 Sep 2026 EDT Jefferies has thrown its weight behind Diageo PLC's (LSE:DGE) plan to fix its ailing US business, telling clients the shares could climb 35% as the turnaround takes hold. The investment bank kept its 'buy' rating on Diageo, the FTSE 100 drinks giant behind Johnnie Walker, Guinness and Smirnoff, with a price target of 2,200p against a current 1,626p. It also nudged up its target on the New York-listed shares to $117, from $108. The US matters more than any other market to the story, accounting for about 40% of sales but, as Jefferies put it, 90% of the conversation. What the analysts like is that the recovery plan does not bank on a bounce in the American spirits market. Diageo's own forecasts assume the US stays weak, with the market shrinking around 3% this financial year before slowly bottoming out towards the end of the decade. Those projections sit below outside data providers, which Jefferies reads as reassurance that the strategy is not built on a "hope trade" of cyclical recovery. Instead, the plan is about execution: dragging the business from losing market share to holding it, and eventually gaining. That is no small task, with roughly 65% of the US portfolio currently losing ground. Jefferies points to four root causes, from long declines at core brands such as Crown Royal, Smirnoff and Captain Morgan to an over-reliance on premium tequila and too little presence in ready-to-drink cans. Winning back tequila, where Don Julio and Casamigos have stumbled, is flagged as one of the biggest battlegrounds. The broker argues the shares look cheap at around 14 times forecast earnings, against 17 times for the wider staples sector, leaving room to re-rate as cash returns come into view. The next test comes on 5 November, when Diageo reports first-quarter trading alongside its annual meeting. Continue reading