Diageo appoints Sir Dave Lewis as CEO; RBC describes move as ‘ a pleasant surprise

Investing.com --  Diageo Plc (LON:DGE), the maker of spirits namely Johnnie Walker, Guinness and Smirnoff, has appointed Sir Dave Lewis as its next chief executive officer, a move that RBC Capital Markets called “a pleasant surprise” and described as a positive development for the company. 

Lewis will begin his role on January 1, 2026, when interim CEO Nik Jhangiani returns to his position as chief financial officer.

RBC in a note dated Monday said it views the leadership change favorably, noting that “we came across Dave when he was at Unilever (he wasn’t ‘Sir’ then) and were impressed; our retail team has a good opinion of him too.” 

The brokerage said it did not anticipate the appointment, saying, “we didn’t see this coming.” RBC added that Lewis was likely chosen not only because the board believes he can “accelerate sales growth and efficiencies” but also because “he has CEO experience and was identified as a catalyst for cultural change.”

Lewis, 60, brings decades of experience in the consumer goods and retail sectors. He served as group CEO of Tesco PLC from 2014 to 2020 and spent nearly 30 years at Unilever prior to that. 

Since 2022, he has been chair of Haleon, a consumer health company, and is scheduled to step down from that role on December 31, 2025.

Jhangiani will continue to lead Diageo as interim CEO through the end of 2025, before resuming his role as CFO. Dierdre Mahlan, who recently returned to Diageo as interim CFO, will remain with the company “to support Diageo through the transition,” according to RBC.

The brokerage emphasized that the announcement came without a scheduled conference call. It maintained a “sector perform” rating on Diageo’s stock and a price target of GBp 2,000. The shares were trading at GBp 1,726.50 at the time of the report.

In its broader analysis, RBC described the current investment outlook for the London-listed distiller as mixed. 

The brokerage said, “The ‘affordable luxury’ investment case is threadbare.” It added that expectations among management and investors have shifted toward “more ‘normal’ consumer staples companies,” highlighting an ongoing debate about “the extent to which headwinds faced by the spirits industry are cyclical or structural.”

In the current market environment, Diageo’s growth potential appears to be more cautious, although the company’s comments on Lewis suggest optimism.