Diageo Offers Up the Drinks, Scoring With Top-Shelf Buyers (at The Wall Street Journal Online)

Americans might be drinking less but they are drinking better and that could turn out to be good news for shareholders of Diageo, the world's largest provider of spirits, wines and beers. The British company's shares trade on the New York Stock Exchange as American depositary receipts, which are changing hands at about $74, and analysts say the price could rise sharply within the next 12 months. What's keeping them down are fears on Wall Street that a sluggish U.S. economy and rising global costs of raw materials like grains, wood and glass, will hurt world-wide sales and earnings this year and near term, especially in the U.S. which accounts for 33% of Diageo's net sales and 39% of operating profits. But both the company and analysts say those fears are unwarranted. Not only Americans, but consumers world-wide are upgrading... [read full story]