Diageo (DEO) Downgraded by Zacks Investment Research to “Sell”

Zacks Investment Research downgraded shares of Diageo (NYSE:DEO) from a hold rating to a sell rating in a research report sent to investors on Monday.

According to Zacks, “Diageo has lagged the industry in the past three months. The company's significant international presence exposes it to major currency risks. In fact, adverse currency fluctuations affected the company’s top-line in first half of fiscal 2018 and continue to pose as a significant risk. Moreover, higher taxes and macroeconomic headwinds remain hurdles. Nevertheless, the company continues being driven by solid fundamentals, innovations and focus on expansion. Also, concentration on achieving growth via buyouts has been yielding results. The company has also been striving toward expanding its presence in emerging regions as well as focus on high-margin products. These factors fueled Diageo’s first-half fiscal 2018 results, wherein sales and earnings rose year over year.”

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A number of other equities analysts have also recently commented on DEO. Jefferies Group set a $157.00 target price on shares of Diageo and gave the stock a buy rating in a research report on Thursday, January 11th. ValuEngine upgraded shares of Diageo from a hold rating to a buy rating in a research report on Thursday, April 12th. Natixis lowered shares of Diageo from a buy rating to a neutral rating in a report on Wednesday, March 7th. Macquarie raised shares of Diageo from an underperform rating to a neutral rating in a report on Wednesday, February 7th. Finally, Royal Bank of Canada lowered shares of Diageo from an outperform rating to a sector perform rating in a report on Monday, January 29th. They noted that the move was a valuation call. One investment analyst has rated the stock with a sell rating, six have issued a hold rating and six have assigned a buy rating to the company. The company presently has an average rating of Hold and an average target price of $153.00.

Shares of NYSE:DEO opened at $137.25 on Monday. Diageo has a 52 week low of $115.85 and a 52 week high of $147.62. The company has a debt-to-equity ratio of 0.69, a current ratio of 1.31 and a quick ratio of 0.63.

The company also recently declared a semiannual dividend, which was paid on Wednesday, April 11th. Shareholders of record on Friday, February 23rd were issued a $1.4232 dividend. This represents a yield of 1.96%. The ex-dividend date of this dividend was Thursday, February 22nd. Diageo’s dividend payout ratio (DPR) is presently 61.78%.

Institutional investors have recently made changes to their positions in the business. Colonial Trust Advisors grew its holdings in Diageo by 13.8% in the 4th quarter. Colonial Trust Advisors now owns 31,756 shares of the company’s stock worth $4,637,000 after acquiring an additional 3,857 shares during the last quarter. Segment Wealth Management LLC grew its holdings in Diageo by 9.0% in the 4th quarter. Segment Wealth Management LLC now owns 17,583 shares of the company’s stock worth $2,567,000 after acquiring an additional 1,455 shares during the last quarter. Burney Co. grew its holdings in Diageo by 39.6% in the 4th quarter. Burney Co. now owns 2,849 shares of the company’s stock worth $416,000 after acquiring an additional 808 shares during the last quarter. Clearbridge LLC grew its holdings in Diageo by 27.5% in the 4th quarter. Clearbridge LLC now owns 51,105 shares of the company’s stock worth $7,463,000 after acquiring an additional 11,019 shares during the last quarter. Finally, Financial Advocates Investment Management bought a new stake in shares of Diageo during the 4th quarter valued at about $339,000. 11.86% of the stock is currently owned by institutional investors and hedge funds.

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Diageo Company Profile

Diageo plc, together with its subsidiaries, produces, markets, and sells alcoholic beverages worldwide. The company offers a collection of brands across spirits, beer, cider, and wine categories. Its brands include Johnnie Walker, Crown Royal, J&B, Buchanan's and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness.

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