Forecast: check out the Diageo share price and dividend outlook for the next 12 months

If the Diageo (LSE: DGE) share worth was a cocktail, the hangover could be horrible. It’s been giving buyers complications for 3 years now, falling greater than 50% in that point.

Buyers like me who’ve been ready for the restoration have seen little respite. Shares within the FTSE 100 spirits maker are down 25% over 12 months, whereas the broader index has soared. As soon as once more, Diageo’s been the social gathering pooper.

All of it went fallacious after a revenue warning in November 2023, as gross sales in Latin America and the Caribbean fell. Diageo’s give attention to premium drinks backfired as cash-strapped prospects traded down. Guinness remains to be in style, however it’s not sufficient to drown out falling demand throughout key markets together with China, the US and Europe.

FTSE 100 straggler

Gen Z is beginning to look very sober, There’s one other existential risk. Fundsmith supervisor Terry Smith warned final 12 months that “the complete drinks sector is within the early phases of being impacted negatively by weight reduction medicine”. He dumped Diageo in response.

Q3 figures from 19 Might provided a slice of hope. Natural internet gross sales rose 5.9% within the third quarter, up from 1% within the first half. However that bounce was principally as a consequence of phasing quirks which can be anticipated to reverse. All areas confirmed pricing energy besides Asia Pacific, the place drinkers continued to downtrade.

Tariffs are wreaking havoc. Diageo faces a $150m hit, notably affecting its Canadian whisky and Mexican tequila. The corporate mentioned it may halve that with value controls however now Donald Trump is ramping up the strain once more, and Diageo is on the slide.

CEO Debra Crew stepped down on 16 July. Her tenure was unfortunate, however somebody has to hold the can. Diageo has now introduced again former CFO Deirdre Mahlan in an interim position, which can assist settle nerves.

Inventory worth displaying

There are causes to stay round. The value-to-earnings ratio has fallen to only over 14, far cheaper than earlier than troubles hit. The trailing dividend yield has crept as much as 4.35%. That’s respectable, however the forecast is a priority. The payout for the 12 months to 30 June 2025 was lower from 103.48 US cents to 102.1 cents.

It’s anticipated to edge again as much as 102.8 cents by 2027, however that’s hardly stellar.

Analysts stay break up. Fundsmith’s Terry Smith has walked away, citing long-term structural issues. Smith could have exited however one other star fund supervisor, Nick Practice, is holding agency, calling Diageo’s manufacturers “distinctive and worthwhile”. Of the 24 brokers overlaying the inventory, 12 fee it a Robust Purchase. However three say Promote.

Consensus analyst forecasts predict a share worth of two,445p inside a 12 months. That may be a mighty 35% bounce from immediately’s 1,830p. That may flip £10,000 into £13,500. A forecast yield of 4.35% would add one other £435, lifting the entire return in direction of £14,000. After all, that’s not a promise.

I’m not topping up, however I’m not promoting both. I wish to show I can maintain my drink – and hope I’m nonetheless standing when the social gathering lastly will get going once more. Or somewhat, if.