American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Diageo share price crashes to key support before earnings: buy or sell?

by admin August 4, 2025
August 4, 2025
Diageo share price crashes to key support before earnings: buy or sell?

Diageo share price continued its strong downward trend in the past few years, making it one of the top laggards in the FTSE 100 Index. It plunged to a low of 1,800p on Monday, down by over 51% from its highest level in 2022. 

DGE stock has tumbled to the lowest level since March 2017, which explains why Debra Crew, its chief executive officer, stepped down, and Nik Jhangiani, the CFO, agreed to serve as the interim CEO. 

Diageo earning ahead

Diageo is one of the top alcoholic beverage companies globally, making popular brands like Johnie Walker, Guinness, Baileys, Smirnoff, Singleton, and Ciroc.

Its business has been under pressure in the past few years, which explains why its sales trajectory and stock are deteriorating. 

It has blamed its performance on currency issues, tariffs, cost pressures, and cautious customers. On tariffs, its products will be affected by the 15% levy set by the Trump administration. 

Analysts anticipate that Diageo’s operating profit will be $5.6 billion for the year to June. If this is correct, it will be another drop after it posted a $6 billion profit in the previous year. 

The company’s main hope is that the growth of its Guinness brand helped to offset a deterioration in the spirits segment. 

In its most recent trading statement, the company said that its net sales ros by just 2.9% in the third quarter to $4.4 billion. This growth was likely due to increased purchasing by American companies ahead of Donald Trump’s tariffs. 

The management also reiterated that the company would hit its annual growth target. However, some analysts believe that recent decision by the CEO to step down is a sign that the company will not hit its target.

Read more: Diageo share price falls as company removes sales growth guidance amid tariff uncertainty: what investors need to know

Is it a contrarian buy?

The Diageo share price has crashed in the past few years and is now sitting at its lowest level in years. This decline has made it a fairly cheap company as it as a price-to-earnings ratio of 15, which is below its historical level. 

As such, the cheaper multiple means that it may attract some dip buyers as the company continues with its $500 million cost-cutting strategy.

The other potential catalyst for the company is that its dividend yield has gone up a bit recently. It has a yield of about 4.34%, which has helped to offset the stock’s plunge. 

Additionally, there are signs that the company will benefit from the announced trade deal between the US, UK, and the European Union. While these deals impose a substantial levy on UK and European goods, they offer some clarity among investors. 

Diageo share price technical analysis

DGE stock chart | Source: TradingView

The weekly chart shows that the DGE stock price has been in a freefall in the past few years, falling from a high of 3,760p in January 2022 to the current 1,810p. It has crashed below all moving averages, a sign that bears are in control.

The current price aligns with the lowest swing in 2022. It has formed a descending channel. At the same time, the stock has formed the highly bearish cup-and-handle pattern whose lower side is at 1,810p. 

Therefore, the stock may rebound to 2,000p after earnings as it forms the handle section of the C&H pattern. In the long term, however, the stock will likely continue falling as sellers target the support level at 1,600p.

The post Diageo share price crashes to key support before earnings: buy or sell? appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Here’s why Lloyds share price popped to a 17-year high today
next post
Why are over 3,200 Boeing workers on strike?

Related Posts

European stocks edge higher on 2024’s last trading...

December 31, 2024

Is the soaring Hims & Hers stock a...

October 3, 2024

UAW’s Tennessee win fuels backers’ hopes in the...

April 27, 2024

Expedia’s cost controls offer hope, but analysts see...

May 10, 2025

US widens AI export bans to 80 firms,...

March 26, 2025

French firm ALTBG grows Bitcoin stash to 1,437...

May 27, 2025

Kia recalling 427,000 Telluride SUVs because they might...

March 31, 2024

Alphabet jumps the most since October on Willow...

December 11, 2024

Dollar Tree is exploring a sale of its...

June 7, 2024

US business activity expands in March, but two...

March 24, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • How Donald Trump’s immigration crackdown may tank the labor market

      August 4, 2025
    • Trump’s tariff threat looms over India’s Russian oil deals

      August 4, 2025
    • Trump moves nuclear submarines near Russia: what triggered the move and what’s ahead

      August 3, 2025
    • BOE rate cuts offer little relief as UK households face mounting financial strain

      August 3, 2025
    • Retail investors shift focus to Europe as US valuations stretch

      August 3, 2025

    Categories

    • Business (3,563)
    • Investing (2,695)
    • Latest News (2,031)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved