Diageo PLC (DGE) fair value: what the stock is really worth
As of Sep 23, 2026: fair value of Diageo PLC £16.85, price £16.21, upside +4.0%, quality 55 out of 100. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Sep 24, 2026.
How to read this chart
60‑month range £13.49 – £36.20 · fair‑value band £9.01 – £24.13 · the £16.21 price screens below the £16.85 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Sep 24, 2026.
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Diageo plc, together with its subsidiaries, engages in the production, marketing, and distribution of alcoholic beverages in North America, Europe, the Asia Pacific, Latin America and Caribbean, and Africa.
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Diageo plc, together with its subsidiaries, engages in the production, marketing, and distribution of alcoholic beverages in North America, Europe, the Asia Pacific, Latin America and Caribbean, and Africa. It offers beer, scotch, gin, vodka, rum, liqueur, raki, wine, Irish and Canadian whisky, US and Indian whisky, Chinese whisky, cachaça, tequila, brandy, and Chinese white spirit beverages. The company also provides ready-to-drink and non-alcoholic beverages. Its principal brands include Johnnie Walker, Don Julio, Guinness, Crown Royal, Smirnoff, Baileys, Captain Morgan, Casamigos, Shui Jing Fang, and McDowell's. The company was formerly known as Guinness plc and changed its name to Diageo plc in February 1998. The company was incorporated in 1886 and is headquartered in London, the United Kingdom.
Stock analysis
Diageo PLC (DGE) currently trades at £16.21, while our model-based Fair Value estimate is £16.85, implying the stock looks roughly 3.8% fairly valued today.
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Valuation
Bull case: the Growth Earnings group reads highest at a median of £18.42 per share, and 9 of the 25 models we run sit above the £16.21 price.
Bear case: the Asset-Based group reads lowest at £3.34, and 16 of the 25 models stay below the price. Evidence for this calculation is medium.
Scenario range: £9.01 (bear) to £24.13 (bull), the price of £16.21 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 55/100 (solid quality), in the Consumer Defensive sector.
Mixed Growth: Revenue is growing, but margins or cash flow do not fully confirm the trend.
Diageo PLC reported revenue of £20.2B in FY2025 versus £12.7B in FY2021, a compound +12.3%/yr. Reported net income was £2.4B in FY2025, compounding −3.0%/yr from FY2021.
Key figures
Market cap 36.1B GBX · P/E ratio 19.8 · P/S ratio 2.30 · EPS (TTM) £0.8200 · Dividend yield 3.8% · Net margin 11.6% · Return on equity 19.7% · Return on assets (EBIT) 12.3%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 60 out of 100 (medium confidence).
What moves the price
The last reported earnings sit well below what analysts expect (earnings in transition, for example after write-downs or an earnings dip); whether the stock is cheap or expensive hinges on the expected recovery actually arriving. Read the fair value with that caveat.
The share trades about 13% below its 52-week high and 20% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Consumer Defensive peers we cover trades at 25% fair-value upside, at 4%, DGE screens richer than that median.
Fair Value models
Bear £9.01Fair Value £16.85Bull £24.13
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above is their evidence-weighted blend, not the output of a single model. Based on fiscal year 2025 figures (about 12 months old). Earnings retained since then (£0.2018 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target.Evidence ⓘEvidence = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.88/100
Revenue is growing, but margins or cash flow do not fully confirm the trend.
Revenue growth 1 year
−0.1%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+9.4%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+11.5%
Start year 2020 (pandemic). Over 10 years: +6.5% a year
Revenue growth 29 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+1.4%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate. Basis: adjusted.
+3.5%
Earnings growth per share plus dividend.
Earnings per share, growth per year−0.3%
Dividend (yield on the price)3.8%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.−1% vs 2%, slowing
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.18% → 21%
Start year 2020 (pandemic)
⚠ 2023: reporting currency changed from GBP to USD; growth across this seam is distorted
Growth Forecast
A lot of optimism in the price
The price assumes about as much growth as the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+10.9%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
−1.8%
Yearly sales growth analysts expect, extended to five years.
After inflation (figures in USD, USA: IMF forecast 2.4% a year to 2030, 3.1% from 2016 to 2025) that is about +8.3% a year for the price and −4.0% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (99 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Neutral
Recent news coverage is roughly neutral, about typical for how stocks are covered.
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Beverages - Wineries & Distilleries · 98 stocks
P/B4.31× · book value is mostly goodwill ⓘGoodwill and other intangible assets are larger than the equity. The book value mainly reflects prices paid for past acquisitions, so we do not rank this P/B against the peer group.
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Diageo PLC Fair Value". https://www.fairvalue-calculator.com/stock/DGE
Frequently asked questions
Is Diageo PLC (DGE) overvalued or undervalued?
As of Sep 24, 2026, our model estimates a fair value of £16.85 versus a price of £16.21, about +4% upside (fairly valued).
What is the fair value of DGE?
Our model-based fair value for Diageo PLC is £16.85 (as of Sep 24, 2026), built from audited fundamentals. The current price: £16.21.
What is the quality score of DGE?
Diageo PLC has a Quality Score of 55/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Diageo PLC (DGE)?
Our model-based price target is the fair value of £16.85 (as of Sep 24, 2026) from 25 valuation models. Cautious scenario £9.01, optimistic scenario £24.13. It is a calculation from audited fundamentals, not an analyst target.
What is the Diageo PLC stock forecast for 2026?
Our models put fair value at £16.85, about +4% upside versus a price of £16.21 (fairly valued). Cautious scenario £9.01, optimistic scenario £24.13. The calculation is refreshed regularly with new filings.
What is the revenue of Diageo PLC (DGE)?
Diageo PLC reported trailing-twelve-month revenue of about $19.8B (latest available figure, as of Sep 24, 2026).
Does Diageo PLC pay a dividend?
Diageo PLC currently shows a dividend yield of about 3.81% relative to its recent price (as of Sep 24, 2026).
What growth is priced into Diageo PLC (DGE)?
For today's price to be fair in a discounted-cash-flow model, Diageo PLC would have to grow free cash flow by +10.9 % per year for five years (discount rate 8.6 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +11.5 % per year. As of Sep 24, 2026.
What discount rate (WACC) does the fair value of DGE use?
Our models discount Diageo PLC at 8.6 %: a base by market capitalisation (large), damped by beta 0.31, country premium for United Kingdom. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Diageo PLC that is +10.9 % per year a year over ten years, using the same discount rate (8.6 %) and the same formula as our fair value.
How much growth has Diageo PLC (DGE) delivered so far?
Over the past 5 years revenue at Diageo PLC grew +11.5 % a year. The price currently implies +10.9 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Diageo PLC (DGE) growing?
The median revenue growth in the sector is +2.8 % a year. That is the yardstick for the growth priced into Diageo PLC (+10.9 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Diageo PLC (DGE)?
The free-cash-flow yield on the price is 5.61 %: that much free cash flow Diageo PLC produces per unit of market value. When it exceeds the discount rate of our models (8.6 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Diageo PLC (DGE)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Diageo PLC it is £16.85 per share (as of Sep 24, 2026), against a price of £16.21. It is the blended result of 25 valuation models (cash flow, earnings, asset, dividend).
Is Diageo PLC stock overvalued or undervalued in 2026?
As of Sep 24, 2026, DGE trades below its calculated fair value: price £16.21, fair value £16.85, a gap of about +4% (fairly valued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of DGE?
No. The price is what the market pays today (£16.21); the fair value is what the company's own numbers justify (£16.85). For Diageo PLC the two are £0.6490 per share apart. That gap is exactly why we show both numbers side by side.
How much is Diageo PLC worth?
The market values Diageo PLC at about 36.1B GBX (market capitalisation, as of Sep 24, 2026). Per share that is £16.21; our models calculate a fair value of £16.85 per share.
What do the bullish and bearish scenarios say about DGE?
Our models span a range for Diageo PLC: cautious scenario £9.01, base £16.85, optimistic £24.13 per share (as of Sep 24, 2026, price £16.21). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of DGE?
Diageo PLC trades at a price-to-earnings ratio of 19.8 (as of Sep 24, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of £16.85 is built from several models across several years. Other multiples: PEG 0.8, P/B 4.3, P/S 2.4, EV/EBITDA 10.7.
What is the PEG ratio of DGE?
The PEG ratio of Diageo PLC is 0.80 (P/E divided by earnings growth, as of Sep 24, 2026). That is below 1, so growth is priced more cheaply than the earnings multiple alone suggests.
How solid is the balance sheet of Diageo PLC (DGE)?
Balance-sheet figures for Diageo PLC (as of Sep 24, 2026): return on equity 19.7%, debt of 1.88 per unit of equity. They feed the Quality Score of 55/100, which measures business quality independently of the share price.
How far is DGE from its 52-week high?
Diageo PLC trades at £16.21, about 13% below its 52-week high of £18.55 and 20% above the low of £13.49 (as of Sep 23, 2026). Distance from the high says nothing about value: that is what the fair value of £16.85 is for.
Which stocks are comparable to Diageo PLC?
From the same area (Consumer Defensive) we also value Kweichow Moutai Co, Wuliangye Yibin Co, Shanxi Xinghuacun Fen Wine Factory Co, Pernod Ricard SA, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Diageo PLC stock attractive at the current price?
The data as of Sep 24, 2026: price £16.21, calculated fair value £16.85 (+4%), Quality Score 55/100, from 25 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of DGE calculated?
We run Diageo PLC through 25 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of £16.85, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 14.1 % above its aggregate fair value. Diageo PLC currently trades 4 % below its own fair value, and the market average says nothing about that. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Diageo PLC (DGE)?
The closing price on Sep 23, 2026 was £16.21. Our model-based fair value is £16.85, about +4% upside (fairly valued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Diageo PLC right now?
The model range is unusually wide (£9.01 to £24.13). The outcome hinges heavily on assumptions, so read the point estimate with caution. The price sits close to our fair value, market and models broadly agree here, little valuation tension.
Where does the earnings growth of Diageo PLC (DGE) come from?
Earnings per share at Diageo PLC grew +6.3 % a year from 2014 to 2025. Broken into its drivers: revenue per share +9.0 %, EBIT margin −0.2 %, tax rate −1.0 %, residual (interest, one-offs) −1.2 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Diageo PLC
How large is the market capitalisation of Diageo PLC (DGE)?
The market capitalisation of Diageo PLC is 36.1B GBX. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Diageo PLC (DGE)?
The price-to-sales ratio of Diageo PLC is 2.30 (P/E × margin). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Diageo PLC (DGE)?
Earnings per share at Diageo PLC are £0.8200 (price ÷ EPS = P/E 19.8). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Diageo PLC (DGE)?
The dividend yield of Diageo PLC is 3.8% (payout 75.4%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Diageo PLC (DGE)?
The net margin of Diageo PLC is 11.6% (fiscal year 2025). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Diageo PLC (DGE)?
The return on equity (ROE) of Diageo PLC is 19.7% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Diageo PLC (DGE)?
On an EBIT basis the return on assets of Diageo PLC is 12.3% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Diageo PLC (DGE)?
The operating margin of Diageo PLC is 31.3% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Diageo PLC (DGE)?
Revenue at Diageo PLC is growing −4.0% versus a year earlier (3y avg +9.4%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Diageo PLC (DGE)?
Earnings per share at Diageo PLC are growing +2.9% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Diageo PLC (DGE) carry?
The net debt of Diageo PLC is $22.2B (fiscal year 2025, ≈ 8.3 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Some data
Sep 24, 2026