All eyes on August 6th: Diageo PLC | Europe

Research evidence excerpt

All eyes on August 6th: Diageo PLC | Europe

Update

July 13, 2026 02:47 PM GMT

Morgan Stanley & Co. International plc+MDiageo PLC | Europe Sarah Simon

Equity Analyst

All eyes on August 6th Sarah.Simon@morganstanley.comTilly Eno +44 20 7425-6064

Tilly.Eno@morganstanley.com +44 20 7677-3662

We refresh estimates to reflect potential on balance-sheet stock David J Roux

build at the end of FY2026, as flagged by the company in its Equity Analyst

David.Roux@morganstanley.com +44 20 7425-1040

aide-memoire. This suggests slightly worse FCF than guidance Chris Linford, CFA

for FY26, but we make no other changes to our estimates ResearchChris.Linford@morganstanley.comAssociate +44 20 7425-1639

besides higher finance costs related to lower FCF. Richard Li

Research Associate

Richard.Li@morganstanley.com +44 20 7425-1976

Key Takeaways

Diageo PLC (DGE.L, DGE LN)

We make no changes to our operating assumptions for FY26 or FY27. We are

ADRDEO.N

broadly in line with consensus for FY26, but more cautious for FY27 Beverages | United Kingdom

Stock Rating Underweight

The company has flagged that it may have increased inventories in anticipation of

Industry View In-Line

potential supply chain disruption in respect of the Iran conflict Price target 1,410p

Shr price, close (Jul 10, 2026) 1,524p

We now reflect this in our estimates, and stand slightly below $2.9bn in 52-Week Range 2,142-1,350p

Mkt cap, curr (mn) £34,046

company-defined FCF for FY26 (which is before minority dividends and cash lease Net debt (06/26e) (mn)* US$21,007

costs) EV, curr (mn)* £51,907

While we wouldn't rule out accelerated cost savings benefiting FY26 more than * = GAAP or approximated based on GAAP

Fiscal Year Ending 06/25 06/26e 06/27e 06/28e

we anticipate, we think the main focus will be on strategic commentary and