Diageo share price outperforms as group kicks off buyback programme

Johnny Walker and Smirnoff owner to return up to £2bn to shareholders

Diageo share price outperforms as group kicks off buyback programme

Shares in Diageo (LON:DGE) have climbed into positive territory in today’s session, as the Johnny Walker and Smirnoff owner announced the start of its buyback programme. The move came after the company announced last month alongside its full-year results that it was planning to return up to £2 billion to shareholders during the year ending June 30, 2019.

As of 09:33 BST, Diageo’s share price had added 0.30 percent to 2,806.00p, outperforming the broader UK market, with the benchmark FTSE 100 index having dipped into negative territory and currently standing 0.64 percent lower at 7,692.12 points. The group’s shares have added more than 13 percent to their value over the past year, as compared with about a 4.3-percent gain in the Footsie.

Diageo starts share buyback programme

Diageo announced in a statement this morning that it had entered into a non-discretionary agreement with Citigroup to execute the first tranche of its £2-billion buyback programme. The initial tranche, which starts today and is expected to end no later than January 31, will be for a value of up to £1.4 billion, with further tranche(s) to be announced during the financial year ending June 30.

The FTSE 100 group announced plans to return cash to shareholders last month, when it also reported a 7.6-percent rise in organic operating profit for the year ended June 30.

Analysts on Johnny Walker owner

Jefferies, which sees Diageo as a ‘buy,’ boosted its price target on the shares from 2,900p to 3,200p this week, while earlier this month, UBS reaffirmed the group as a ‘buy,’ hiking its valuation on the shares from 2,880p to 3,100p. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 2,820p.

As of 09:58 BST, Friday, 10 August, Diageo plc share price is 2,797.00p.

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