UBS Lifts Diageo Price Target Amid Earnings Revisions from Cost Savings

12:29 PM EDT, 08/27/2026 (MT Newswires) -- UBS Global Research on Thursday increased its price target for Diageo (DGE.L) to 18.50 pounds sterling from 16 pounds to reflect its upward earnings upgrades from cost savings. The research firm noted the alcoholic beverage group's focus on improving its competitiveness in the US, adding that it is "more positive" on the company's growth potential in Europe. "Diageo's significant restructuring over the next two years and detailed guidance gives management sufficient bandwidth to rewire the organisation and to improve competitiveness, in a way that takes the bear case of persistent US growth downgrades off the table, whilst still ensuring earnings growth. However, for Diageo to fully close the valuation gap with staples peers, we think investors need to believe in a medium term organic sales growth profile of [greater than] 3% or at least closer to c4%, which requires 1) US Spirits to stabilise/North America to grow; 2) and/or Rest of the World to over deliver," analysts said. "We remain Neutral, as we don't think these proofs points are forthcoming in the next 6-12m." For fiscal years 2027 through 2029, analysts lifted their EPS estimates by 5% to 7%, with the updated amounts now broadly in line with consensus. Meanwhile, organic revenue forecasts over the three-year period were trimmed.