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Is this Large Market Cap Stock target price reasonable for Diageo plc (NYSE:DEO)?

The company in question is, Diageo plc (NYSE:DEO) currently with a stock price of 113.84 (0.94% today). The market cap for Diageo plc is 70684.86, and is in the sector Consumer Goods, and Beverages – Wineries & Distillers industry. The target price for Diageo plc is 119.31. Currently Diageo plc is trading with a P/E of 21.51, and a forward P/E of 20.23. Average volume for Diageo plc is 798.74 and so far today it is 239443.

Performance in the last year for Diageo plc has been -2.68%. For EPS growth, Diageo plc has seen a growth of 2.10%, and is looking to grow in the next year to -16.13%. More long term stats show that EPS growth has been 7.40% over the last five years and could be 4.70% for the next five years. Diageo plc has seen sales growth quarter over quarter at -5.50%, with EPS growth quarter over quarter at -17.20%. The 20-day simple moving average is 4.32%, with the 200-day simple moving average coming to 4.81%.

Since the IPO date for Diageo plc on the 5/13/1996, Diageo plc has seen performance year to date to be 4.71%. With Diageo plc trading at 113.84, the dividend yield is 2.25%, and the EPS is 5.24.

So could Diageo plc, be undervalued? Well as said before P/E is 21.51. The PEG is 4.58, P/S is 5.04 and the P/B is at 6.51. The P/cash is 69.54, with P/free cash flow at 82.42.

Diageo plc ability to deal with debt shows that the current ratio is 1.5, and the quick ratio is 0.8. This is with long term debt/equity at 1.03, and total debt/equity at 1.28.

In terms of margins, Diageo plc has a gross margin of 57.60%, an operating margin of 30.70% and a profit margin of 23.50%.Payout ratio for Diageo plc is 58.20%. Return on assets come to 9.60% with return on investment coming to 15.40%.

Insider ownership for Diageo plc, is at 0.70% and institutional ownership comes to 11.80%. Outstanding shares are at 626.75. While shares float is 625.78. The float short is currently 0.34%, and short ratio is 2.65.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Tony Dabbs

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