LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg raised their target price on drinks maker Diageo from £37.0 to £39.0 on Wednesday following the firm's "upbeat" capital markets day.
Berenberg noted that ahead of Diageo's recent capital markets day, the company had updated its 2022 full-year guidance, indicating that it was now expecting to deliver at least 16% organic net sales growth in the first half, and also committed to delivering medium-term organic sales growth within a range of 5-7% and organic operating profit growth of 6-9%.

While the analysts stated the medium-term guidance could be viewed as being in line with expectations, they reckon that the new explicit guidance reflects management's confidence and leaves behind the uncertain times brought by the pandemic.

The German bank added that Diageo offers "attractive exposure to the outperforming spirits market of the US" and acknowledged that despite its "leading position in the US", it had even managed to gain share through the pandemic, in contrast to the share losses experienced in the years preceding.

That said, Berenberg opted to retain its 'hold' recommendation on the stock as its preference among the large spirits players was still Pernod Ricard.

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