Diageo shares fell by -1.7% during the day's afternoon session, and are now trading at a price of $93.82. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
an Increase in Expected Earnings Improves Its Value Outlook but Priced Beyond Its Margin of Safety:
Diageo plc, together with its subsidiaries, engages in the production, marketing, and distribution of alcoholic beverages in North America, Europe, the Asia Pacific, Latin America and Caribbean, and Africa. The company belongs to the Consumer Staples sector, which has an average price to earnings (P/E) ratio of 25.91 and an average price to book (P/B) ratio of 3.03. In contrast, Diageo has a trailing 12 month P/E ratio of 22.2 and a P/B ratio of 18.8.
Diageo has moved -32.0% over the last year compared to 15.5% for the S&P 500 — a difference of -47.5%. Diageo has a 52 week high of $142.73 and a 52 week low of $93.62.
Overview of Financial Statements:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $10,831 | $10,436 | $11,753 | $15,611 | $15,181 | $15,176 |
| Net Margins | 28% | 14% | 23% | 18% | 15% | 14% |
| Net Income (M) | $3,160 | $1,409 | $2,660 | $2,841 | $2,342 | $2,075 |
| Diluted Shares (M) | 2,601 | 2,562 | 2,559 | 2,498 | 2,460 | 2,432 |
| Earnings Per Share | $1.21 | $0.55 | $1.04 | $1.19 | $0.98 | $0.87 |
| EPS Growth | n/a | -54.54545454545454% | 89.0909090909091% | 14.423076923076913% | -17.64705882352941% | -11.224489795918366% |
