Going forward, we expect Diageo’s top-line to increase at a modest pace, driven by an increase in revenues across all geographies. However, in 2H 09, revenues are expected to decline as recessionary market conditions impact organic growth of the company. In the North American region, consumers are switching from the super and ultra-premium brands to premium and value brands....

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Diageo Plc (Diageo) reported strong top- and bottom-line growth in 1H 09. However, margins were constrained during the period due to higher operating expenses. Given the ongoing difficult operating environment, Management has lowered its FY 2009 operating profit guidance. As a result, although the current target price does not support a HOLD, we maintain our HOLD rating for the common stock and we will reassess our common stock…

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Diageo PLC’s (Diageo) revenues were above our estimate while operating profit and adjusted net profit were below our expectations. Revenue growth was aided by strong performance from all regions, particularly Europe and International business geographies, inclusive of Asia Pacific, during FY 2008....