Diageo (LSE: DGE) shares currently trade at 1,594p, a level not seen since spring 2012, representing a remarkable collapse from the stock’s peak.
The FTSE 100 drinks giant hit its all-time high of around 4,036p in December 2021, when pandemic lockdowns drove consumers toward home cocktail experimentation.
The shares have since fallen 53% over five years and 20% over the past 12 months, reflecting a prolonged and painful decline for investors.
The rot set in after the pandemic, as inflation squeezed consumers and drinkers shifted toward cheaper local brands across key markets.
A pivotal moment arrived on 10 November 2023, when the board shocked markets by slashing guidance after sales in Latin America and the Caribbean plunged 20%.
That region accounted for roughly 11% of group revenues, making the collapse a significant blow to overall performance.
Full-year net profits have deteriorated sharply, falling from $4.45bn in 2023 to $3.87bn in 2024, and then to $2.54bn in 2025.
Donald Trump’s tariffs compounded the pressure by hitting Mexican tequila and Canadian whisky exports into the US, while investors also fretted over Gen Z sobriety trends and GLP-1 weight-loss drugs.
The US market remains the single biggest concern, accounting for around 40% of net sales, and higher oil prices threaten to squeeze consumers and push up transport costs simultaneously.
Despite this backdrop, sentiment has shifted noticeably, with the shares climbing almost 12% in a single month as some investors sense stabilisation may be approaching.
Third-quarter sales, reported on 6 May, rose just 0.3% to $4.5bn, narrowly beating expectations, though the result was partly boosted by an earlier Easter and distributors stocking up ahead of the FIFA World Cup.
New chief executive Sir Dave Lewis declined to upgrade full-year guidance following those results, keeping a cautious tone about the near-term outlook.
However, Trump’s decision to remove US tariffs on Scotch whisky offered meaningful relief, while investors also spotted early signs of stabilisation in Africa and Latin America.
Deutsche Bank upgraded the shares to Buy, arguing that excessive market pessimism had already been priced into the stock at current levels.
Consumer shares more broadly have shown signs of life as markets hold onto hopes of some resolution to the Iran crisis, though that remains far from certain.
With a price-to-earnings ratio of 13.2 and Sir Dave Lewis now leading the business, the case for a gradual recovery remains intact, even if the path is likely to remain uneven.