MARKET REPORT: Analysts toast Diageo as it rules out Guinness sale
MARKET REPORT: Analysts toast Diageo as it rules out Guinness sale
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Guinness is still good for you. That was the verdict of analysts at Jefferies after owner Diageo said it has ‘no intention’ to sell the famous Irish stout brand or its stake in Moet Hennessy. A report by Bloomberg last week said the FTSE 100 giant –the world’s biggest maker of spirits – was exploring options for both Guinness and its investment in LVMH’s Moet Hennessy drinks unit. Guinness was said to be valued at around £8billion.
But over the weekend, Diageo dismissed the report, saying: ‘We note the recent media speculation around the Guinness brand and our stake in Moet Hennessy and we can confirm that we have no intention to sell either.’. Diageo shares, which ticked higher on the reports last week, dipped 0.3 per cent, or 0.42p, to 124.71p.
But in a report entitled Guinness Is Still Good For You, Jefferies analysts Edward Mundy and Andrei Andon-Ionita gave Diageo a ‘buy’ rating and a target price of 2800p. They said the company will ‘start to look different’ as confidence in its spirits business increases and added that the arrival of ‘heavyweight’ finance chief Nik Jhangiani in September will lead to ‘a renewed focus’ on growth, profits and cash.
Not for sale: Diageo has dismissed suggestions it is looking to sell the Guinness Irish stout brand and its stake in Moet Hennessey. The report also said the confirmation that Guinness and the Moet Hennessy stake are not for sale ‘points to confidence’ in the future.
With global technology stocks tumbling as the emergence of low-cost Chinese artificial intelligence firm DeepSeek raises questions over the valuation of the US giants and others, the FTSE 100 inched up 0.02 per cent, or 1.36 points, to 8503.71 while the FTSE 250 slid 0.7 per cent, or 148.55 points, to 20369.5.
