Despite showing signs of life recently, ‘s ( ) price is down 35% from its 2022 highs. And I continue to think this is a opportunity I’m not willing to miss. Historically, opportunities to buy Diageo shares at attractive prices haven’t come around all that often.
So rather than wondering when the stock’s going to recover, I’m looking to buy it. Valuation Diageo shares currently trade at a price-to-earnings (P/E) ratio of just under 19 and have a of 3.2%.
Both of these represent unusually good value. Over the last decade, the chance to buy the stock and get a dividend yield hasn’t come around often. In general, investors have had to settle for something between 2% and 3%.
Diageo shares traded at some unusual P/E multiples during the Covid-19 pandemic. But even in more usual times, investors have generally had to pay above 20 times earnings for the stock. I don’t think anything significant has changed with the underlying business though.
So while I wouldn’t have bought the stock at its highs, it’s a different story now. Macroeconomic challenges Diageo’s been battling through a difficult macroeconomic environment, which is why the stock’s been falling. Furthermore, there’s reason to think this might continue.
recently reported earnings for the third quarter of 2024. And the results were disappointing, with revenues down 3% compared to the previous year. That has investors wary of a luxury goods recession, but the biggest decline came in its Wines & Spirits.
