Bernstein reiterates Outperform rating on Diageo stock as Sir Dave Lewis named CEO

Investing.com - Bernstein has reiterated an Outperform rating and GBP24.20 price target on Diageo PLC (LON:DGE) (NYSE:DEO) following the announcement of Sir Dave Lewis as the company’s new CEO. The spirits giant’s shares currently trade at $90.80, down 25.65% year-to-date and significantly below their 52-week high of $132.34. According to InvestingPro analysis, Diageo appears undervalued at current levels, with analysts setting a consensus target implying 26% upside potential.

Sir Dave Lewis, former CEO of Tesco and a veteran with 27 years of experience at Unilever, will take the helm at the spirits giant effective January 1, 2026. At that time, current interim leader Nik Jhangiani will return to his role as CFO.

Lewis brings extensive consumer goods experience, having served as Chairman of Unilever UK, President of the Americas, and playing a key role in developing the Dove brand. His background includes international experience in South America and Indonesia.

Most recently, Lewis served as Chairman of Haleon and currently holds a non-executive director position at PepsiCo. His most notable achievement was overseeing a "radical recovery" at Tesco , where he served as CEO from 2014 to 2020.

While Lewis has never worked specifically in the spirits industry, Bernstein analyst Trevor Stirling believes he "has the right toolkit for Diageo," noting that "top-line turnarounds take time." Diageo offers a substantial 5.46% dividend yield and maintains a "FAIR" financial health score of 2.24 according to InvestingPro, which provides comprehensive Pro Research Reports on Diageo and 1,400+ other stocks with in-depth analysis and actionable investment insights.

In other recent news, Diageo has reported its Q1 FY26 results, revealing flat organic sales growth that slightly exceeded market expectations. Despite this, the company has lowered its full-year guidance. Following these results, Bernstein has adjusted its price target for Diageo, reducing it from GBP25.50 to GBP24.20. However, Bernstein continues to maintain an Outperform rating on the spirits maker. The price target adjustment reflects a weaker outlook for Diageo in both the US and China markets. These developments are important for investors to consider as they assess Diageo’s future performance.

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