Diageo: analyst upgrade boosts share

(CercleFinance.com) - Diageo shares rallied on Wednesday after Credit Suisse raised its expectations for the British liquor group, saying that it expects it to recover more quickly than its fFrench rival Pernod Ricard.


The firm upgraded the stock to "outperform" from "neutral" and raised its target price to 3,450 pence, from 2,750 pence.

In its comments on the European spirits sector, Credit Suisse said that both Diageo and Pernod look well placed for a solid recovery, although pointed out that the maker of Johnnie Walker whiskey and Smirnoff vodka should benefit from its greater exposure to the robust US market.

The broker also highlighted that Diageo has higher exposure to the fastest-growth categories, a more premium portfolio and a better track record in terms of innovation.

Diageo shares were up nearly 2% on the upgrade, compared to a 0.3% drop in the FTSE 100 index.

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