![\"Group](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/05\/ce8e78436e822aa2c24730bee0e1e97d.jpeg\")
Image source: Getty Images <\/p>\n Image source: Getty Images <\/p>\n
Back in 2023, Diageo (LSE: DGE) issued a profit warning after seeing falling sales in Latin America, and the share price started to slide. And slide, and slide\u2026<\/p>\n
But this is one of the world\u2019s leading booze makers, responsible for many global headline brands \u2014 Johnnie Walker, Guinness, Smirnoff, Rumple Minze\u2026 it\u2019s got \u2019em all.<\/p>\n
Good money after bad? <\/p>\n
It\u2019s tempting to buy into Diageo just because of the share price slump. And for investors who already own a stake, the urge to double down must be strong.<\/p>\n
After all, the world isn\u2019t likely to give up on booze any time soon \u2014 I\u2019m not a gambler, but I might take a wager on that. And much of Diageo\u2019s troubles stem from global inflation, tariffs and trade wars, and the resulting drive to seek out cheaper alcoholic beverages.<\/p>\n
When pockets are squeezed, Aldi\u2019s Highland Earl (\u00a312.49) can be a more attractive proposition than Johnnie Walker Black Label (\u00a336 at Tesco). So does it make sense to Buy, and Hold until the economy gets better?<\/p>\n
It\u2019s vital to keep an eye on valuation. And even after the big price fall, we\u2019re still looking at a forecast price-to-earnings (P\/E) ratio of 13 for this year. That\u2019s not obviously screaming cheap. So is it possible Diageo shares have just been overvalued, and we\u2019ve had a needed correction?<\/p>\n
New boss to the rescue <\/p>\n
I don\u2019t think the headline P\/E reflects Diageo\u2019s true worth either. There\u2019s around \u00a320bn net debt on the books against a market-cap of \u00a334bn. On that basis, the valuation still looks a bit premium to me. And one of the tasks facing new CEO Sir Dave Lewis \u2014 he of Tesco turnaround fame \u2014 is to convince investors the stock deserves it.<\/p>\n
Sir \u2018Drastic\u2019 Dave had this to say at Q3 update time\u2026<\/p>\n
North America remains our biggest challenge, where market conditions are soft and our offer needs to be more competitive \u2026 Progress on the re-design of our new strategy and the shaping of a more competitive operating framework is well underway.<\/p>\n
CEO Sir Dave Lewis, 6 May 2026<\/p>\n
Judging by his past, that new strategy is expected to be tough. Employees around the world are reportedly waiting nervously for the cost-cutting\/jobs axe to fall.<\/p>\n
So what should investors do? <\/p>\n
It\u2019s tempting to buy Diageo shares just on the back of Lewis\u2019s track record. Anyone who invested early in his reign at Tesco has done well out of it \u2014 even with that recovery being derailed for a couple of years by the pandemic.<\/p>\n
A look at the Diageo share price suggests investor sentiment might be turning. Since March\u2019s low, it\u2019s up around 14%. It\u2019s dangerous to think in terms of timing, for sure \u2014 but we might just be at a pivot point now.<\/p>\n
So should investors consider buying Diageo now? Consider, yes, I\u2019d say definitely. Will I buy? The temptation is strong. But weighing valuation against debt means I need to observe and think some more. I\u2019ll wait.<\/p>\n
Should you invest \u00a35,000 in Diageo Plc right now? <\/p>\n
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.<\/p>\n
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?<\/p>\n
See The Six Stocks<\/p>\n
Alan Oscroft does not hold any positions in the companies mentioned.<\/p>\n
The post How much longer can the Diageo share price stay this low?<\/a> appeared first on The Twelfth Magpie<\/a>.<\/p>\n More reading<\/p>\n Motley Fool UK 2026<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Back in 2023, Diageo (LSE: DGE) issued a profit warning after seeing falling sales…\n","protected":false},"author":2,"featured_media":49218,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21250],"tags":[4110,1451,21283,5692,3187],"class_list":["post-67338","post","type-post","status-publish","format-standard","has-post-thumbnail","category-diageo","tag-diageo","tag-investors","tag-johnnie-walker","tag-share-price","tag-tesco"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116786744723067353","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/67338","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=67338"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/67338\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/49218"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=67338"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=67338"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=67338"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}