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Diageo targets $1B cost savings with new CEO, keeps buy rating amid flat sales outlook

Analyst Insights
19 Aug 2026
Seeking Alpha
View Source
Bullish
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Diageo is reaffirmed as a Buy due to its ongoing cost-saving efforts, strong balance sheet, and a promising turnaround led by the new CEO. The company aims to save $1 billion over two years, with significant operational and supply chain savings expected by fiscal year 2027. Despite a forecast of flat organic net sales and a temporary dip in free cash flow to around $2 billion due to restructuring costs, the valuation remains conservative, suggesting confidence in the company's long-term prospects.

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