Shares in Diageo (LON:DGE) have climbed higher in today’s session even as the maker of Johnny Walker and Smirnoff flagged a currency hit on full-year sales and profits. The company, however, assured investors that its performance was in line with expectations.
As of 13:24 BST, Diageo’s share price had added 0.44 percent to 2,624.5p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.15 percent higher at 7,342.08 points. The group’s shares have added more than eight percent to their value over the past year, as compared with about a one-percent rise in the Footsie.
Diageo updates on performance
Diageo issued a trading update today, noting that its financial year had started well, with performance in line with the company’s expectations. Despite increased volatility in some markets, the group continues to expect its net sales growth in F19 to be broadly in line with last fiscal year and consistent with its medium-term guidance of mid-single digit growth.
Diageo, however, noted that in recent weeks it had experienced some increased emerging market foreign exchange volatility, partially offset by a strengthening of the dollar. As a result, the Johnny Walker and Smirnoff maker currently expects exchange to have a negative impact on net sales of £175 million and a negative impact on operating profit of £45 million for the fiscal year.
Analysts weigh in on group
“The year has started well and performance is in line with expectations”, Jefferies commented, as quoted by Reuters.
Goldman Sachs, which sees Diageo as a ‘buy,’ set a price target of 3,100p on the shares today. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 2,844.50p.