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Diageo plc

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Diageo's significant international presence exposes it to major currency risks. In fact, adverse currency fluctuations marred the company’s sales and operating profit in fiscal 2018 and are likely to significantly affect results in fiscal 2019. Additionally, cautious consumer spending and government regulations might weigh on the company's sales and hurt overall profitability. Higher taxes and macroeconomic headwinds also remain hurdles. However, the company has outperformed the industry in the past three months driven by its acquisition strategy as well as strong earnings and sales performance. The company’s solid fundamentals, innovations and focus on expansion remain encouraging. Further, concentration on achieving growth via buyouts has been yielding results. The company has also been striving toward expanding its presence in emerging markets while focusing on high-margin products.

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