DEO

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Diageo’s share price has fallen roughly 44% over the past five years, yet a Discounted Cash Flow (DCF) estimate currently points to the stock trading at a sizeable discount to its intrinsic value, while broader valuation checks paint more of a mixed picture than a clear bargain. The roughly 43.9% share price decline over five years suggests investors have marked Diageo down heavily relative to its past positioning. The new cost cutting program under CEO Sir Dave Lewis can support margins and cash generation. However, job reductions and restructuring may carry execution risk if they disrupt operations or brand investment. Diageo scores 3 out of 6 on valuation checks, which signals a mixed picture rather than a clearly cheap or clearly expensive stock. The issue now is whether Diageo’s current discount to intrinsic value offers enough compensation for the business and execution risks tied to its turnaround plan. Find out why Diageo's -15.4% return over the last year is lagging behind its peers. The Discounted Cash Flow model estimates what Diageo’s future cash generation could be worth in today’s money. On the latest figures, Diageo produced about US$3.0b of free cash flow over the last twelve months, and the model uses a growing but relatively steady cash flow profile rather than very aggressive expansion. Based on these cash flow projections, the model points to an intrinsic value of about £32.56 per share. This valuation implies the stock is around 47.1% undervalued relative to the current market price. The recent decision to cut nearly 2,000 jobs as part of Sir Dave Lewis’s US$1b cost saving plan helps explain why the market is cautious, even though the cash flow based estimate sits well above where the shares trade today. On this Discounted Cash Flow view, Diageo stock currently appears undervalued relative to the cash it is expected to generate. Our Discounted Cash Flow (DCF) analysis suggests Diageo is undervalued by 47.1%. Track this in your watchlist or portfolio, or discover 9 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Diageo. The P/E multiple suits Diageo because earnings remain a key focus for investors in large, mature consumer brands. Diageo currently trades on a P/E of about 30.1x. This is well above the beverage industry average of roughly 17.1x, yet below the peer group average of about 38.8x. A fair P/E ratio for Diageo, based on its profile and risk, is estimated at around 28.4x, which is only slightly lower than where the stock trades now. That small gap suggests the market is broadly in line with this tailored fair multiple, even if Diageo carries a premium to the wider beverage sector. The current P/E does not look like a clear bargain or an extreme stretch relative to what the company’s earnings profile might justify. On the P/E measure, Diageo stock looks roughly fairly valued rather than clearly cheap or expensive. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where the valuation puzzle for Diageo leaves off and explain what path for growth, margins and earnings would need to occur for the stock to be worth much more or much less than today’s price. Each narrative links its number to a clear view on how Diageo's growth, profitability and risks might evolve, which you can return to as fresh data appears on the Community page. Community views on Diageo are wide apart, with one side seeing a reset opportunity and the other focusing on structural headwinds. Bull case: 12% undervalued Read the full Bull Case to see why Diageo could be undervalued Bear case: 18% overvalued Read the full Bear Case to see why Diageo could be overvalued Do you think there's more to the story for Diageo? Head over to our Community to see what others are saying! The Discounted Cash Flow (DCF) view flags Diageo as undervalued, while the market multiple picture looks closer to about right, which leaves the stock in a grey zone rather than a clear opportunity or clear trap. The gap reflects different emphasis. The intrinsic value estimate leans on the durability of future cash flows, while the P/E multiple is more about how much investors are prepared to pay today for those earnings. The key question from here is whether Diageo delivers on its cost savings and brand investment without denting growth, which will decide whether the current discount is justified or excessive. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DGE.L. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Diageo plc DEO reported preliminary fiscal 2026 results, ending June 30, 2026, wherein pre-exceptional earnings per share rose 0.7% year over year to 165.3 cents.On a reported basis, net sales declined 3% year over year to $19.6 billion. Organic net sales fell 2%, pressured by weakness in North America and the Asia Pacific, partly offset by growth in Europe, Latin America and Africa. Volume declined 0.4%, while unfavorable price/mix reduced performance by 1.6%. Diageo plc price-consensus-chart | Diageo plc Quote The negative price/mix was primarily driven by adverse mix, reflecting weaker performance in US Spirits and softer results elsewhere.The company delivered a free cash flow of $3.2 billion, up $463 million year over year, supported by disciplined investment and lower capital expenditure. Organic operating profit increased 2%, helped by cost savings from the Accelerate program.Shares of the Zacks Rank #4 (Sell) company have lost 15.2% in the past year against the industry’s 12.6% growth. Image Source: Zacks Investment Research North America remained the biggest challenge for Diageo, with organic net sales declining 8.4% year over year. The decline was driven primarily by US Spirits weakness, particularly in tequila, wherein net sales fell 21.1% due to category softness, increased competition and tougher comparisons.Within US Spirits, Don Julio net sales declined 19.2% year over year, while Casamigos net sales dropped 27.7%. The company noted that Casamigos price repositioning and a refreshed marketing campaign are being rolled out to improve competitiveness. Meanwhile, Diageo Beer Company USA posted growth, supported by Guinness and Smirnoff RTD performance. DEO recorded stronger momentum outside North America, with Europe, Latin America and Africa contributing growth. Europe organic net sales increased 3.4%, supported by Guinness momentum in Great Britain and Ireland, along with strong performance in Türkiye.Latin America and Caribbean organic net sales grew 7.7%, driven by Brazil and Colombia, while Africa delivered 13.3% organic net sales growth. In the Asia Pacific, organic net sales declined 6.3% due to weakness in Chinese white spirits, which offset strong growth in India. Diageo’s organic operating profit increased 2% year over year despite lower sales, as cost savings helped offset pressure from adverse mix, inflation and tariffs. The organic operating margin expanded 116 basis points, reflecting benefits from the Accelerate program.The Accelerate initiative delivered $540 million in savings in fiscal 2026. These savings came from more efficient advertising and promotion spending, supply-chain improvements and lower overhead costs. Advertising and trade investment savings contributed $230 million, supply-chain initiatives added $180 million and overhead actions delivered $130 million. DEO generated $4.4 billion in net cash from operating activities and $3.2 billion in free cash flow during fiscal 2026. Capital expenditure was $1.2 billion, reflecting a disciplined approach to investment compared with the prior year.The company ended the year with net debt of $20.5 billion, down $1.4 billion from the prior year. Its leverage ratio improved to 3.1X from 3.4X, supported by strong cash generation. Diageo also recommended a full-year dividend of 50 cents per share under its revised dividend payout policy. Diageo recorded significant exceptional charges in fiscal 2026, including $1.5 billion in impairment charges and $0.9 billion in restructuring costs. The impairment charges were largely related to Türkiye, the Don Papa brand and other smaller brands.The company is implementing a two-year restructuring program focused on a new operating framework. Diageo expects the revised framework to generate $850 million in savings over two years, beginning in fiscal 2027, allowing investment in competitiveness while supporting operating profit.Looking ahead, Diageo highlighted the need to improve competitiveness in North America while continuing to build on momentum in Europe, Latin America and Africa. Management expects the operating framework changes and cost savings to support future investment priorities. DEO expects fiscal 2027 organic net sales growth to be broadly flat, with North America organic net sales projected to decline in the mid-single-digit range. The company assumes the North American market will decline 3% while improving its share performance from that in fiscal 2026.The company expects fiscal 2027 organic operating profit growth in the low- to mid-single-digit range, supported by savings from its operating framework changes and supply-chain initiatives. Diageo expects to realize 40% of the $850-million operating framework savings in fiscal 2027, along with approximately 25% of the $150-million supply-chain savings.For fiscal 2027, DEO forecasts a free cash flow of $2 billion after around $800 million of exceptional cash costs related to operating framework changes and $50 million of exceptional cash costs tied to the supply-chain savings program. The company expects to end fiscal 2027 near the midpoint of its target leverage of 2.5X-3X net debt to EBITDA, assuming completion of the East African Breweries PLC and Royal Challengers Bengaluru transactions.Over the medium term, Diageo expects low-single-digit organic net sales growth from fiscal 2027 through fiscal 2029, with growth accelerating as North America stabilizes and gains share. The company projects mid-single-digit organic operating profit growth over the period, supported by savings and a more favorable mix, while expecting a free cash flow of $8 billion after around $850 million of exceptional cash costs. The Vita Coco Company Inc. COCO is the leading coconut water brand in the United States, leveraging its strong brand equity, expanding global presence and asset-light business model to capitalize on the growing demand for healthier hydration beverages. COCO currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for Vita Coco’s current fiscal-year sales and earnings implies growth of 31.6% and 64.7%, respectively, from the year-ago reported figures. COCO has delivered a trailing four-quarter earnings surprise of 21.9%, on average.The Coca-Cola Company KO is a leading beverage company with a portfolio of 32 billion-dollar brands spanning sparkling beverages, water, sports drinks, dairy and value-added beverages. KO currently carries a Zacks Rank #2 (Buy).The Zacks Consensus Estimate for Coca-Cola’s current fiscal-year sales and earnings implies growth of 3.6% and 9.7%, respectively, from the year-ago reported figures. Coca-Cola delivered a trailing four-quarter earnings surprise of 4.6%, on average.Primo Brands Corporation PRMB is a leading North American branded beverage company focused on healthy hydration. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for Primo Brands’ current fiscal-year sales indicates growth of 1.6% from the prior year’s reported level. PRMB delivered a trailing four-quarter earnings surprise of 7.7%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Diageo plc (DEO) : Free Stock Analysis Report CocaCola Company (The) (KO) : Free Stock Analysis Report Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report Primo Brands Corporation (PRMB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Diageo (LSE:DGE) has drawn fresh attention after reporting full year results to June 30, 2026, showing softer sales, revenue and earnings alongside a major cost saving and Guinness investment plan. See our latest analysis for Diageo. Diageo’s latest results and cost saving plan have coincided with a sharp shift in sentiment, with a 1 day share price return of 5.58% contributing to a 30 day share price return of 10.74%, even though the 1 year total shareholder return declined 11.21%. This suggests that recent momentum is improving from a weaker long term base. If this news has you reassessing your watchlist, it could be a good time to widen the lens and check out 8 top founder-led companies After Diageo’s sharp bounce on the cost saving and Guinness investment plan, the key issue now is whether that move has already captured most of the upside or whether it still leaves meaningful value on the table as the numbers stand today. Diageo’s most widely followed narrative places fair value at £19.55 versus a last close of £17.33, which frames the recent rebound against a still implied discount. Read the complete narrative. Want to understand why this narrative still sees upside from here? The engine room is slow headline growth paired with a very different margin and earnings profile underneath. Curious which long term assumptions need to hold for that fair value to make sense. Result: Fair Value of £19.55 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this Diageo narrative can still be knocked off course if alcohol moderation trends deepen or if regulatory and tax pressures squeeze margins harder than expected. Find out about the key risks to this Diageo narrative. With Diageo’s story presenting both caution and optimism, it makes sense to move quickly and check the underlying data yourself, then weigh up the 2 key rewards and 4 important warning signs If Diageo’s latest move has sharpened your focus, you can keep that momentum going by scanning other opportunities that match your goals and risk comfort. Target potential mispricings by reviewing companies that currently look attractively valued using the 7 high quality undervalued stocks. Strengthen your income stream by checking out stocks that feature reliable payouts through the 4 dividend fortresses. Reduce potential downside by focusing on companies with sturdier finances in the 7 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DGE.L. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Strong free cash flow of $3.2 billion, up $463 million year-over-year, enabling debt reduction. Organic operating profit growth of 2%, supported by cost savings from the accelerate program. Good momentum in Europe, Latin America, and Africa, with double-digit growth in Guinness in Great Britain and strong performance in Brazil and Colombia. India delivered organic net sales growth of around 7%, driven by prestige brands and innovation. Leverage ratio improved to 3.1 times from 3.4 times, with further deleveraging expected from asset sales. Delivered 85% of the accelerate program savings in fiscal '26, totaling $514 million. North America organic sales declined 8.4%, with tequila sales down approximately 21% due to weakness in Casamigos and Don Julio. Asia Pacific organic sales fell around 6%, impacted by continued weakness in Chinese white spirits. Gross profit declined $506 million organically due to adverse product mix, cost inflation, and tariffs. Reported operating profit before exceptionals declined 0.4%, with significant impairment charges of $1.5 billion and restructuring charges of $0.9 billion. Organic sales declined 3% overall, with volume losses in North America and Asia Pacific. Marketing spend was reduced, reflecting cost savings but potentially impacting long-term brand investment. Warning! GuruFocus has detected 6 Warning Signs with DEO. Is DEO fairly valued? Test your thesis with our free DCF calculator. Q: What were the key drivers behind the mixed fiscal '26 results, and how did the company's strategic priorities perform?A: Nick, CFO, explained that fiscal '26 was a mixed year with strong momentum in Europe, Latin America, and Africa, but challenges in North America and Asia Pacific. The company made good progress on its three priorities: building relevant brands, customer and channel management, and a more agile operating framework. Group operating profit increased 2%, and excluding the impact from Chinese white spirits, organic sales would have declined only 0.5%, with organic profit growth around 4.5%. The implementation of the new operating model is well progressed, and savings from restructuring will allow investment without reducing operating profit. Q: Can you elaborate on the significant impairment and restructuring charges taken during the year?A: Nick, CFO, detailed that the company incurred impairment charges of $1.5 billion and restructuring charges of approximately $0.9 billion. The impairment included a $786 million charge related to the Turkey business and goodwill from the Meihiki acquisition, largely due to hyperinflationary accounting impacts, and a $287 million charge for the Don Papa brand due to the decline of the rum category in Europe. Restructuring charges of $752 million were mainly related to the new operating framework, with the balance for supply chain and the accelerate program. The total restructuring plan over two years is $1.2 billion, with expected savings of around $1 billion. Q: What caused the 8.4% organic sales decline in North America, and what is the outlook for the US spirits market?A: Nick, CFO, attributed the North America decline to softness in US spirits, particularly tequila, which declined approximately 21%, driven by both Casamigos and Don Julio. This was due to tough comps for Don Julio and down-trading within a weaker category. The company is focused on becoming more competitive in the US and will share more details at the capital markets day. John will discuss this further, indicating a strategic focus on addressing the challenges in the US market. Q: How did the company manage its cash flow and leverage during the year?A: Nick, CFO, reported strong free cash flow delivery of $3.2 billion, up $463 million on last year, driven by disciplined CapEx investment and lower tax payments. Net debt closed at $20.5 billion, down $1.4 billion, with leverage at 3.1 times, down from 3.4 times. The sale of the 65% shareholding in EABL is expected to delever the balance sheet by circa 0.25 times, and the sale of Royal Challengers Bangalore should result in around a 0.1 times reduction in net debt to EBITDA. Q: What were the regional performance highlights, particularly in Europe, Africa, and Latin America?A: Nick, CFO, highlighted that Europe delivered organic net sales growth of approximately 3%, driven by double-digit growth in Guinness in Great Britain and strong volume growth in Turkey. Africa saw broad-based net sales growth with strong double-digit growth in South Africa and strong beer performance across East Africa. Latin America saw net sales growth in most markets, with particularly strong performance in Brazil and Colombia, including a recovery in consumer confidence in Brazil in the second half following counterfeit alcohol incidents. Q: How did the Asia Pacific region perform, and what was the impact of Chinese white spirits?A: Nick, CFO, explained that APAC organic sales declined around 6%, with the negative impact of Chinese white spirits on regional net sales being circa 8%. Excluding Chinese white spirits, APAC sales would have been up low single-digits. India delivered strong organic sales growth of around 7%, driven by momentum in prestige and above segment brands, despite adverse impacts from excise policy changes in Maharashtra. Q: What is the company's dividend policy and payout for fiscal '26?A: Nick, CFO, announced a recommended full year dividend of $0.50 per share, equating to a 30% dividend payout ratio, in line with the dividend payout policy of 30 to 50% that was moved to earlier in the year. This reflects the company's commitment to returning value to shareholders while maintaining a strong balance sheet. Q: Can you provide details on the cost savings from the accelerate program and how they will be used?A: Nick, CFO, stated that the company delivered $514 million, or circa 85% of the accelerate program in fiscal '26. Savings came from A&P efficiencies ($210 million), lower overheads ($130 million), supply savings ($180 million), and trade spend efficiency ($20 million). These savings will allow the company to invest in innovation selectively and improve competitiveness without reducing operating profit, as will be detailed further at the capital markets day. Q: What were the main drivers of the organic operating profit growth despite lower gross profit?A: Nick, CFO, explained that gross profit declined $506 million organically due to adverse product mix, cost inflation, and tariffs, partly mitigated by cost efficiencies. However, organic profit growth was supported by savings from accelerate, more efficient A&P and overhead spend. Marketing spend was lower, reflecting accelerate savings and deliberate prioritization, while the company's commitment to investing in brands for the future remains unchanged. Q: How is the company addressing the challenges in the US market, and what is the strategic focus going forward?A: Dave, CEO, emphasized that the company is focused on becoming more competitive in the US and will share more details at the capital markets day. The three priorities set out earlier in the year have laid a firm foundation. The restructuring program, with significant savings, will allow investment in innovation and competitiveness. Dave expressed deep appreciation for Diageo colleagues' engagement with the change program, which is mostly communicated throughout the business. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Diageo plc DEO is scheduled to release preliminary results for fiscal 2026 on Aug. 6. The alcoholic beverage company, which reports results on a half-yearly basis, posted top- and bottom-line declines, and lower organic operating profit in the first half of fiscal 2026.DEO is expected to register declines in the top and bottom lines when it reports fiscal 2026 numbers. The Zacks Consensus Estimate for quarterly earnings has moved down 1.7% in the past 30 days to $6.34 per share.The consensus estimate for earnings indicates a decline of 3.5% from the year-ago quarter’s reported number. The consensus estimate for Diageo’s quarterly revenues is pegged at $20 billion, which indicates a decline of 1.1% from the figure reported in the prior-year quarter. DEO shares have exhibited a downtrend, falling 9.5% in the past three months, underperforming the broader industry’s growth of 4.6% and the Consumer Staples sector’s decline of 0.6%. The Zacks Rank #4 (Sell) stock has also lagged the S&P 500 index’s growth of 8.5%. Image Source: Zacks Investment Research From the valuation standpoint, DEO trades at a forward 12-month P/E multiple of 13.84X, underperforming the industry average of 15.83X and the S&P 500’s average of 20.28X. Diageo’s valuation appears quite cheap compared with the industry at current levels. Image Source: Zacks Investment Research Diageo has been grappling with weak demand in the United States and China, leading to volume declines, an unfavorable sales mix, and continued top-line pressure. These trends are raising concerns over earnings growth and pushing out the timeline for a meaningful recovery. In North America, performance has been hurt by pressure on consumer disposable income, weighing on U.S. spirits demand, while in the Asia Pacific, the growing preference for Chinese white spirits has further impacted sales.Diageo has revised its near-term outlook downward, reflecting continued demand weakness and macro uncertainty. The company predicted organic sales to decline 2-3%, reflecting further weakness in the United States, including the effects of Chinese white spirits. Additionally, operating profit growth is expected to remain muted, with a flat to low-single-digit increase, mainly driven by the updated net sales guidance and the tariff impacts. Earnings are expected to be impacted by lower operating profit and disposals, signaling limited near-term momentum.Diageo has been facing sustained margin headwinds from an unfavorable shift in product mix, cost inflation and tariff impacts. Premium categories such as tequila have slowed, reducing the contribution of profitable brands. As consumers shift toward lower-priced alternatives, the mix benefit that historically supported the gross margin is fading, leading to weaker profitability despite relatively stable pricing in some regions.Input cost inflation, logistics expenses and supply-chain inefficiencies continue to weigh on gross profit. Although operational efficiencies and cost-saving initiatives under the “Accelerate” program are helping offset some of these pressures, they are not fully mitigating the impacts of lower gross margins. Tariff-related uncertainties, particularly on imports into the United States, also pose incremental risks to cost structures. Even with mitigation strategies in place, tariffs are expected to create additional friction on the operating margin, limiting near-term earnings recovery and keeping profitability under pressure. Here are a few companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.Primo Brands Corporation PRMB has an Earnings ESP of +16.51% and a Zacks Rank #2 (Buy) at present. PRMB is likely to register top-line growth when it releases second-quarter 2026 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.76 billion, which implies a rise of 1.8% from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The consensus estimate for Primo Brands’ quarterly earnings has declined a penny in the past 30 days to 34 cents per share, implying a drop of 5.6% from the year-ago quarter’s reported number. PRMB delivered an earnings surprise of 1.4%, on average, in the trailing four quarters.Kraft Heinz Company KHC currently has an Earnings ESP of +0.82% and a Zacks Rank #2. The company is likely to register declines in the top and bottom lines when it reports second-quarter 2026 numbers. The consensus mark for revenues is pegged at $6.2 billion, which indicates a decrease of 3% from the figure reported in the year-ago quarter. The Zacks Consensus Estimate for KHC’s quarterly earnings per share of 53 cents implies a decline of 23.2% from the year-ago quarter’s actual. The consensus mark has been unchanged in the past 30 days. KHC has a trailing four-quarter earnings surprise of 10.2%, on average.Monster Beverage MNST currently has an Earnings ESP of +2.61% and a Zacks Rank #3 (Hold). The company is expected to register growth in its top and bottom lines when it reports second-quarter 2026 results. The Zacks Consensus Estimate for MNST’s quarterly earnings was unchanged in the last 30 days at 59 cents per share, indicating 13.5% growth from the year-ago quarter's reported number.The consensus estimate for Monster Beverage’s quarterly revenues is pegged at $2.4 billion, implying a rise of 14.5% from the figure registered in the prior-year quarter. MNST reported a negative earnings surprise of 9.6%, on average, in the trailing four quarters. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Diageo plc (DEO) : Free Stock Analysis Report Monster Beverage Corporation (MNST) : Free Stock Analysis Report Kraft Heinz Company (KHC) : Free Stock Analysis Report Primo Brands Corporation (PRMB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Brown-Forman Corporation BF.B presents investors with a mixed setup. The company has premium brands, improving cash flow and growth pockets in emerging markets and Travel Retail. With fiscal 2027 expected to bring flat organic net sales and lower organic operating income, the case looks balanced. At $27.80 as of June 24, 2026, BF.B carried a six-12 month price target of $29. The stock trades at 18.2X trailing earnings and 16.3X the current fiscal year earnings estimate, with a price-to-sales ratio of 3.3 and a PEG ratio of 2.6. Image Source: Zacks Investment Research The Zacks Consensus Estimate for fiscal 2027 earnings is $1.71 per share, up from fiscal 2026 earnings of $1.53. Fiscal 2027 sales are estimated at $3.94 billion compared with $3.93 billion in fiscal 2026. That modest sales lift contrasts with the expected 3-5% decline in organic operating income.Estimate trends are not clearly negative. The current fiscal year EPS estimate has moved 0.9% higher over the past four weeks, but the Earnings ESP of -0.3% and last EPS surprise of -63.6% keep the signal mixed. Image Source: Zacks Investment Research Brown-Forman’s appeal remains rooted in premiumization, whiskey strength and innovation. Its portfolio includes Jack Daniel’s, Woodford Reserve, Old Forester, Diplomático and Gin Mare, with Jack Daniel’s anchoring its global whiskey presence.Innovation is giving the business some lift. Jack Daniel’s Tennessee Blackberry reached almost 300,000 nine-liter depletions in the United States by fiscal year-end and almost 150,000 nine-liter depletions across six European launch markets. Whiskey products’ net sales increased 3% on a reported basis and 1% organically in fiscal 2026.New Mix also stands out. Its net sales increased 41% on a reported basis and 33% organically, helped by share gains in Mexico and its launch in the United States. Diageo plc DEO offers spirits-market context through its global premium drinks portfolio. Constellation Brands, Inc. STZ offers a cross-category comparison because it operates across beer, wine and spirits. The counterweight is demand pressure in developed markets. In fiscal 2026, U.S. net sales declined 7% on a reported basis and were flat organically, hurt by lower Jack Daniel’s Tennessee Whiskey volumes and unfavorable portfolio mix.Developed International net sales were flat on a reported basis but fell 3% organically. The decline reflected the absence of American-made beverage alcohol from retail shelves in most Canadian provinces, along with declines in Germany and the United Kingdom. Canada fell nearly 60% in fiscal 2026.Category softness adds caution. Tequila portfolio net sales declined 4% on a reported basis and 6% organically in fiscal 2026, while non-branded and bulk net sales fell 68% because of lower used-barrel sales. BF.B looks like a Hold because brand strength and cash generation are being offset by weak earnings momentum and a cautious fiscal 2027 outlook. Cash flow from operations rose to $1 billion in fiscal 2026, and free cash flow increased to $893 million.The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Its Zacks Style Scores are mixed, with a Value Score of C, Growth Score of C, Momentum Score of B and VGM Score of C. The Momentum Score is the better part of the setup, while the broader C scores point to a neutral profile.For now, BF.B’s strengths appear real, but the earnings signals do not fully support a stronger stance. Investors may want to see steadier developed-market demand and clearer margin recovery before turning more constructive. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Brown-Forman Corporation (BF.B) : Free Stock Analysis Report Diageo plc (DEO) : Free Stock Analysis Report Constellation Brands Inc (STZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Ambev (NYSE:ABEV), a Latin American beverage producer, edged up 0.30% on Friday to finish at $3.29, extending the week’s gains. It reported better-than-expected earnings early in the week, and investors are watching how beer demand and an expanded product range can shape its earnings power. Trading volume reached 72.4 million shares, coming in 193% above its three-month average of 24.7 million shares. Ambev IPO'd in 1997 and has grown 631% since going public. The S&P 500 (SNPINDEX:^GSPC) advanced 0.76% to finish Friday at 7,393, while the Nasdaq Composite (NASDAQINDEX:^IXIC) gained 1.71% to close at 26,247. Among beverage and beer industry peers, Anheuser-Busch InBev (NYSE:BUD) closed up 1.03% at $79.89, while Diageo (NYSE:DEO) gained 1.04% to end at $84.30 as investors assessed recent volume trends. Ambev soared by more than 13% this week after strong quarterly results on Tuesday beat expectations. Growth in beer revenues from Central America and the Caribbean offset weaker figures from Brazil and South America. Its no-alcohol beers are also gaining traction in Brazil, which could help it meet changing consumer habits. The upcoming World Cup will drive further demand and give Ambev an opportunity to build on its Q1 momentum. Following the results, Barclays reiterated its “Hold” rating on the stock, but increased its price target from $2.50 to $3.50. Before you buy stock in Ambev, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ambev wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $475,926!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,296,608!* Now, it’s worth noting Stock Advisor’s total average return is 981% — a market-crushing outperformance compared to 205% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 8, 2026. Emma Newbery has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc and Diageo Plc. The Motley Fool has a disclosure policy. Stock Market Today, May 8: Ambev Gained 13% This Week on Strong Earnings was originally published by The Motley Fool