Diageo plc

The Coca-Cola Company KO has reported second-quarter 2025 results, with the bottom line surpassing the Zacks Consensus Estimate. Meanwhile, the top line missed the consensus mark. The company’s revenues and earnings per share (EPS) improved year over year. The results have benefited from continued business momentum, aided by enhanced pricing across markets. This quarter’s results once again highlight the strength of KO’s resilient, all-weather strategy.
Coca-Cola reported a comparable EPS of 87 cents in the second quarter, up 4% from the year-ago period. Comparable EPS also beat the Zacks Consensus Estimate of 83 cents. Unfavorable currency translations hurt the comparable EPS by 5 percentage points. Comparable currency-neutral earnings per share rose 9% year over year.
Revenues of $12.54 billion grew 1% year over year but missed the Zacks Consensus Estimate of $12.59 billion. Organic revenues rose 5% from the prior-year quarter, led by growth across all segments, except for Bottling Investments. Coca-Cola’s reported revenues benefited from growth across most operating segments, except for Latin America and Bottling Investments. The improved price/mix in the quarter was offset by lower concentrate sales and adverse currency rates.
For the second quarter of 2025, KO gained a global value share in the total non-alcoholic ready-to-drink beverages category.
Shares of Coca-Cola dipped nearly 1% in the pre-market trading session following the mixed second-quarter results. The Zacks Rank #2 (Buy) stock has risen 12.6% in the year-to-date period compared with the industry’s growth of 6.7%.
Image Source: Zacks Investment Research
Detailed Picture of KO’s Q2 Volume & Pricing
In the reported quarter, concentrate sales were down 1% year over year, while the price/mix improved 6%. The price/mix benefited from pricing actions across the marketplace and a favorable mix. The impacts of high-inflation markets were lower in second-quarter 2025 compared with the same period last year.
In the second quarter, concentrate sales were in line with unit case volume. Coca-Cola’s total unit case volume fell 1% year over year in the second quarter, led by declines in Mexico, India and Thailand, which more than offset growth in Central Asia, Argentina and China.
Our model predicted year-over-year organic revenue growth of 4.9% for the second quarter, with a 5.8% gain from the price/mix and a 0.9% decline in the concentrate sales volume.
CocaCola Company (The) Price, Consensus and EPS Surprise
Coming to the cluster-category performance, the unit case volume dipped 1% year over year for the sparkling soft drinks category. The trademark Coca-Cola’s unit volume dropped 1%, led by a decline in Latin America, offset by growth in EMEA. Coca-Cola Zero Sugar advanced 14%, aided by growth in all geographic operating segments. The sparkling flavors category declined 2% year over year, backed by a decline in the Asia Pacific, offset by growth in EMEA.
Volume for juice, value-added dairy and plant-based beverages was down 4% in the second quarter, led by growth in the Asia Pacific, offset by an improvement in Latin America.
Unit volume for the water, sports, coffee and tea category was flat year over year in the second quarter. Coca-Cola witnessed flat volume growth in the water category, as improvement in EMEA and the Asia Pacific was fully offset by a decline in Latin America. Sports drinks fell 3%, driven by declines in Latin America, negated by gains in North America. The coffee business rose 1% due to growth in the Asia Pacific. The tea volume was flat, backed by growth in EMEA, offset by declines in North America.
Peek Into KO’s Segmental Details
Reported revenues rose 3% year over year each for North America and the Asia Pacific, and improved 5% for EMEA. However, revenues declined 4% for Latin America and 8% for Bottling Investments.
Organic revenues improved 13% year over year in Latin America, 3% in North America, 4% in EMEA and 5% in the Asia Pacific. Meanwhile, organic revenues were down 2% in Bottling Investments.
Analyzing Coca-Cola’s Q2 Margins
In dollar terms, the operating income surged 63% year over year to $4.28 billion, including a 6-point impact of currency headwinds. Comparable operating income rose 8.5% year over year to $4.38 billion. Comparable currency-neutral operating income advanced 15% on strong organic revenue growth across most segments, effective cost management and the timing of marketing investments.
The operating margin of 34.1% in the second quarter expanded significantly from 21.3% in the prior-year quarter. The comparable operating margin expanded 193 bps to 34.7%. The comparable currency-neutral operating margin expanded 325 bps to 36%.
Our model predicted the second-quarter adjusted operating margin to contract 10 bps year over year to 32.7%, driven by a 30-bps increase in the SG&A expense rate.
KO’s Guidance for 2025
Management has reiterated its organic revenues guidance for 2025 and updated its EPS view. It anticipates organic revenue growth of 5-6% for 2025. Comparable net revenues are expected to include a 1-2% currency headwind based on current rates and hedge positions (compared with 2-3% currency headwind expected earlier). The guidance also includes a 1% negative impact of acquisitions, divestitures and structural changes. The company anticipates an underlying effective tax rate of 20.8% for 2025.
Comparable currency-neutral EPS for 2025 is expected to increase 8% year over year, at the mid-point of the prior-mentioned 7-9%. The company anticipates comparable EPS growth of 3% for 2025 from the $2.88 reported in 2024. The revised guidance is at the high-end of the prior mentioned 2-3%.
Comparable EPS growth is expected to include currency headwinds of 5% (compared with 5-6% headwind mentioned earlier). The EPS guidance also includes a 1% negative impact of acquisitions, divestitures and structural changes compared with a marginal impact mentioned earlier.
Management envisions an adjusted free cash flow of $9.5 billion for 2025, including $11.7 billion in cash flow from operations. Capital expenditure is likely to be $2.2 billion.
For third-quarter 2025, comparable revenues are expected to include a 1% currency headwind. Comparable EPS is estimated to include a 5-6% currency headwind.
Other Stocks to Consider
We have highlighted three other top-ranked stocks from the Consumer Staples sector, namely Vita Coco Company COCO, Zevia ZVIA and Diageo DEO.
Vita Coco produces and sells coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa, and the Asia Pacific. The company currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for COCO’s 2025 earnings and sales indicates growth of 12.5% and 6.5%, respectively, from the previous year’s reported figures. Vita Coco has a trailing four-quarter average earnings surprise of 28.2%.
Zevia is focused on addressing health challenges resulting from excess sugar consumption by offering a portfolio of zero sugar, zero calorie, naturally sweetened beverages. It presently has a Zacks Rank #2.
The Zacks Consensus Estimate for Zevia’s 2025 sales and EPS indicates growth of 3.4% and 48.4%, respectively, from the prior-year reported levels. ZVIA delivered a trailing four-quarter earnings surprise of 33.6%, on average.
Diageo is involved in producing, distilling, brewing, bottling, packaging and distributing spirits, wine and beer. DEO currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Diageo’s 2025 sales implies growth of 0.7% from the previous year’s reported numbers. Meanwhile, DEO’s earnings estimate indicates a year-over-year decline of 2.3%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Coca-Cola Beats on Earnings in Q2, But Falls Short on Revenues

(RTTNews) - Diageo plc (DEO, DGE.L), a provider of alcoholic beverages, announced Wednesday that Debra Crew has stepped down as Chief Executive Officer and as a Board Director with immediate effect, by mutual agreement.
The Board has begun a comprehensive formal search process, which will include consideration of internal and external candidates. Until a permanent appointment is made, Nik Jhangiani, Chief Financial Officer, will assume the role of Chief Executive Officer on an interim basis.
Crew has led Diageo as Chief Executive Officer since June 2023, having joined Diageo as a non-executive director in 2019, then serving as President of Diageo North America and subsequently as Group Chief Operating Officer.
Crew was previously Chief Operating Officer of the company from October 2022 to June 2023, and she also served as President, North America and Global Supply, Diageo plc from July 2020 to September 2022.
The company said the guidance for fiscal 2025 and 2026 remains unchanged from what was shared on May 19, 2025 in the third quarter Trading Statement.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Diageo Names Nik Jhangiani As Interim CEO After CEO Debra Crew Steps Down

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the First Trust Value Line Dividend Index Fund ETF (Symbol: FVD), we found that the implied analyst target price for the ETF based upon its underlying holdings is $48.99 per unit.
With FVD trading at a recent price near $44.36 per unit, that means that analysts see 10.44% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of FVD's underlying holdings with notable upside to their analyst target prices are Diageo plc (Symbol: DEO), Toyota Motor Corporation (Symbol: TM), and Honda Motor Co Ltd (Symbol: HMC). Although DEO has traded at a recent price of $108.08/share, the average analyst target is 15.96% higher at $125.33/share. Similarly, TM has 14.34% upside from the recent share price of $182.88 if the average analyst target price of $209.10/share is reached, and analysts on average are expecting HMC to reach a target price of $33.60/share, which is 13.59% above the recent price of $29.58. Below is a twelve month price history chart comparing the stock performance of DEO, TM, and HMC:
Below is a summary table of the current analyst target prices discussed above:
Name
Symbol
Recent Price
Avg. Analyst 12-Mo. Target
% Upside to Target
First Trust Value Line Dividend Index Fund ETF
FVD
$44.36
$48.99
10.44%
Diageo plc
DEO
$108.08
$125.33
15.96%
Toyota Motor Corporation
TM
$182.88
$209.10
14.34%
Honda Motor Co Ltd
HMC
$29.58
$33.60
13.59%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Implied FVD Analyst Target Price: $49

Diageo plc’s DEO recent stock performance reflects strong investor confidence in its fundamentals and strategic initiatives. The company’s shares have seen a 7.5% improvement in the past month, outpacing the industry’s 5.7% increase, the Consumer Staples sector’s 2.3% growth and the S&P 500’s 2.9% increase, suggesting resilience in a challenging market environment.
DEO Stock's Price Performance In the Past Month
Image Source: Zacks Investment Research
This upward momentum can be attributed to several key drivers, including the strength of its premium and globally recognized brand portfolio, featuring names such as Johnnie Walker, Guinness, and Tanqueray, which reinforces pricing power and customer loyalty.
Moreover, the company’s continued investments in innovation, digital transformation and e-commerce have improved both operational efficiency and consumer connectivity. Diageo’s disciplined approach to cost management and margin enhancement has also played a vital role in mitigating inflationary pressures, further supporting its recent stock gains.
DEO’s Growth Momentum
Diageo has been experiencing significant gains from improved price/mix, which have been aiding growth despite soft volume. In the first half of fiscal 2025, organic net sales rose 1% year over year, marking a return to organic sales growth and a sequential improvement from the second half of fiscal 2024. Hence, management expects to continue driving productivity and pricing to offset the cost inflation.
Diageo is refining its $2 billion productivity program to drive efficiency across the business to bring sustainable growth. A key focus is balancing cost savings with strategic reinvestment, particularly in marketing and brand activation. It remains committed to maximizing value while building the right capabilities for success.
By leveraging advanced data analytics through its Catalyst tool, Diageo aims to enhance the effectiveness of its A&P spend, prioritizing high-impact marketing while reducing non-working costs. The company is also optimizing media efficiencies, allowing it to reinvest savings into growth initiatives while strengthening operating leverage. A stronger focus on commercial excellence ensures better brand visibility at points of sale and expanded on-premise presence.
Near-Term Pressures Weigh on DEO Stock
Despite its recent gains, Diageo’s broader stock performance has faced pressure due to underlying operational challenges and macroeconomic headwinds. In the first half of fiscal 2025, the company reported a 0.6% year-over-year decline in net sales, primarily due to soft volume trends across key markets. Economic uncertainty, persistent inflationary pressures and cautious consumer sentiment led to volume declines in major regions.
Further weighing on investor sentiment are rising overhead costs, including staffing and strategic investments, which have compressed profitability. Currency fluctuations also significantly impacted operating profit, while organic operating profit declined and operating margins contracted, intensifying concerns over the company's earnings potential.
In Asia Pacific, performance weakened as well, with reported net sales down 4% year over year. This was attributed to a mix of organic sales decline, the divestiture of Windsor and a business reclassification to Europe. Organic net sales in the region fell 2.6%, affected by challenging macroeconomic conditions in Greater China, soft demand in Southeast Asia and tough year-over-year comparisons due to prior stock replenishment of Shui Jing Fang. Collectively, these factors have dampened investor confidence and weighed on Diageo’s stock performance despite its long-term strengths.
DEO’s Valuation Picture
Diageo’s premium valuation is becoming a concern amid slowing growth and rising costs. The stock is currently trading at a forward 12-month P/E ratio of 17.36X, significantly higher than the industry average of 16.30X.
This elevated multiple may be hard to justify given soft volume trends across key regions and macroeconomic uncertainties. This stretched valuation could limit upside potential in the near term, especially if performance fails to accelerate meaningfully.
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DEO’s Investment Strategy
Diageo’s robust brand portfolio, strategic investments and productivity initiatives position it well for recovery once macro conditions stabilize. However, until there is greater visibility on volume recovery and margin improvement, investors may prefer to wait for a better entry point or confirmation of sustained earnings momentum. For now, long-term investors should hold existing positions and monitor key indicators, particularly margin trends, FX impacts and progress on volume stabilization. Given these dynamics, DEO currently carries a Zacks Rank #3 (Hold).
Three Stocks Looking Good
Primo Brands Corporation PRMB is a branded beverage company with a focus on healthy hydration, delivering sustainably and domestically sourced diversified offerings across products, formats, channels, price points and consumer occasions, distributed primarily in every state and Canada. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Primo Brands’ current financial-year sales and EPS indicates growth of 146.9% and 57.4%, respectively, from the prior-year levels. PRMB has a trailing four-quarter earnings surprise of 7.2%, on average.
Molson Coors Beverage Company TAP, a global manufacturer and seller of beer and other beverage products, has an impressive, diverse portfolio of owned and partner brands. TAP currently flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for Molson Coors’ current financial-year EPS indicates growth of 6.7% from the prior-year levels. The company has a trailing four-quarter earnings surprise of 18.1%, on average.
United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. It currently carries a Zacks Rank of 2 (Buy). UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.
The consensus estimate for United Natural Foods’ current financial-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures.
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Molson Coors Beverage Company (TAP) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Diageo Stock Rises 7.5% in a Month: Buy or Wait for a Pullback?

Wednesday, May 7, 2025
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Verizon Communications Inc. (VZ), Bristol-Myers Squibb Co. (BMY) and Canadian Pacific Kansas City Ltd. (CP), as well a micro-cap stock Nova LifeStyle, Inc. (NVFY). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Ahead of Wall Street
The daily 'Ahead of Wall Street' article is a must-read for all investors who would like to be ready for that day's trading action. The article comes out before the market opens and attempts to make sense of that morning's economic releases and how they will affect that day's market action. You can read this article for free on our home page and can actually sign up there to get an email notification as this article comes out each morning.
You can read today's AWS here >>> Pre-Markets in the Green: Disney Beats, Fed Report Awaits
Today's Featured Research Reports
Shares of Verizon Communications have gained +12.8% over the past six months against the Zacks Wireless National industry’s gain of +13.5%. The company recorded relatively healthy first-quarter 2025 results with both the top and bottom lines beating the Zacks Consensus Estimate.
With one of the most efficient wireless networks in the U.S., the company continues to deploy advanced technologies to deliver faster peak data speeds and capacity for customers, driven by customer-focused planning, disciplined engineering and constant strategic investment. Its focus on mix-and-match pricing across wireless and home broadband offerings has contributed to solid customer additions. The continued expansion of 5G mmWave in multiple markets is a positive development.
However, fierce competition from major players is hurting VZ’s profits. Heavy promotional spending and discounts to drive subscriber growth are putting pressure on margins. Macroeconomic challenges remain a concern.
(You can read the full research report on Verizon Communications here >>>)
Bristol-Myers Squibb shares have outperformed the Zacks Medical - Biomedical and Genetics industry over the past year (+14.3% vs. -17.6%). The company reported better-than-expected first quarter results driven by higher demand for Opdivo, Breyanzi, Reblozyl and Camzyos. Consequently, the annual guidance was raised to reflect this performance. Recent label expansions of blockbuster oncology drug Opdivo should fuel further growth.
However, generic competition for Revlimid, Pomalyst, Sprycel and Abraxane is adversely impacting revenue growth. While the performance of new drugs such as Opdualag, Camzyos and Cobenfy is encouraging, they will take some time to make a significant contribution to the top line.
Nonetheless, Bristol Myers’ efforts to streamline operations should boost the bottom line. Shares of the company are driven by the encouraging efforts to boost both top-line and bottom-line growth.
(You can read the full research report on Bristol-Myers Squibb here >>>)
Shares of Canadian Pacific have declined -9.4% over the past year against the Zacks Transportation - Rail industry’s decline of -12.6%. The company’s high operating expenses continue to weigh on the company's bottom line. CP's highly leveraged balance sheet is also a cause for worry. High capex may also create headwinds. Considering all these factors, investors are advised not to bet on the stock now. They should wait for a better entry point.
Nevertheless, following the approval of the merger with Kansas City Southern, the company is known as Canadian Pacific Kansas City Limited. The deal is anticipated to draw synergies (annually) of $1 billion within three years.
The merged entity has started to offer a daily premium intermodal service between the U.S. Midwest and Mexico. The Zacks analyst is impressed with Canadian Pacific Kansas City's efforts to reward its shareholders through dividends and share repurchases.
(You can read the full research report on Canadian Pacific here >>>)
Nova LifeStyle’s shares have underperformed the Zacks Furniture industry over the past year (-51.6% vs. -28.1%). This microcap company with market capitalization of $14 million is facing ongoing losses, revenue contraction, high administrative costs and execution risk in portfolio revamp challenge scalability and margin stability amid macro demand sensitivity.
Nevertheless, Nova LifeStyle’s 2024 gross margin rose to 44% from 38% as the firm exited low-margin products and boosted average selling price (ASP) by 43%, despite a 12.6% sales decline. Operating expenses fell 9.2%, lowering net loss to $5.6 million from $7.7 million, but general and administrative costs rose 19.8%, and research and development (R&D) cuts limited innovation gains.
A revamped product mix and North America focus (97.4% of sales) support pricing power, yet a 39% volume drop and Asian market exit signal weak demand. Sourcing diversification to Vietnam, India and Malaysia mitigates trade risk, though reliance on third-party vendors raises delivery and quality concerns.
(You can read the full research report on Nova LifeStyle here >>>)
Other noteworthy reports we are featuring today include Diageo plc (DEO), TC Energy Corp. (TRP) and Edwards Lifesciences Corp. (EW).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Diverse Product Portfolio, Strategic Alliances Aid Verizon (VZ)
New Drugs Fuel Bristol Myers (BMY) Amid Generic Competition
Canadian Pacific (CP) Rides on Dividends Amid Rising Expenses
Featured Reports
Productivity Initiatives to Aid Diageo (DEO) Amid Inflation
Per the Zacks analyst, Diageo is refining its $2 billion productivity program to drive efficiency across the business while ensuring long-term sustainable growth and balancing cost savings.
TC Energy's (TRP) Vast Pipeline Network Fuels Future Growth
The Zacks analyst believes that TC Energy's robust pipeline infrastructure and gas storage assets offer a solid foundation for future growth, but its debt of over C$45 billion remains a concern.
Edwards (EW) Rides on Solid TMTT Sales and Global Prospects
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Strong Demand, Expansion Actions Aid Nucor (NUE)
While Nucor faces headwinds from weak selling prices, it will benefit from strong demand in its major markets and efforts to boost production capacity, per the Zacks analyst.
Healthy Demand Aid Equity Residential (EQR) Amid High Supply
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Strategic Buyouts to Aid Genuine Parts (GPC) Amid Tariff Woes
Acquisitions of MPEC and Walker has strengthened Genuine Parts' NAPA store network and Midwest footprint. However, cost pressures due to tariffs may limit the firm's profits, per the Zacks analyst.
New Upgrades
Juniper (JNPR) Rides on Healthy Demand Trends, AI Focus
Per the Zacks analyst, solid momentum in the Cloud and Enterprise verticals will likely drive Juniper's top line. A strong focus on advancing the AI networking portfolio is a tailwind.
Encompass Health (EHC) Gains From Expansionary Measures
The Zacks Analyst believes that Encompass Health's expansion through de novo hospitals will drive patient volumes and profit levels.
Paylocity (PCTY) Rides on Strong Demand for Cloud Solutions
Per the Zacks analyst, Paylocity is benefiting from strong adoption of its cloud-based Human Capital Management (HCM) and payroll software solutions tailored for mid-sized businesses.
New Downgrades
Rising Expenses & Oil Price Volatility Ail SM Energy (SM)
Per the Zacks analyst, SM Energy's profits suffer due to falling oil prices and rising lease operating and transportation costs, threatening future revenue and cash???flow stability.
PC Market Weakness Hurts Dell Technologies (DELL) Prospects
Per the Zacks analyst, Dell is suffering from a challenging macroeconomic environment. It suffers from stiff competition in the PC market from the likes of HP and Lenovo.
Soft OSB Segment & Macro Woes Hurt Louisiana-Pacific (LPX)
Per the Zacks analyst, Louisiana-Pacific is hurting from to lower selling prices and decreased sales volumes in the OSB segment. Also, rising costs from expected tariffs are added concerns.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
Diageo plc (DEO) : Free Stock Analysis Report
Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report
TC Energy Corporation (TRP) : Free Stock Analysis Report
Nova Lifestyle, Inc (NVFY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Top Research Reports for Verizon Communications, Bristol-Myers Squibb & Canadian Pacific

You might not think Warren Buffett would be a big fan of high-yield dividend stocks. However, a perhaps surprising number of stocks in his Berkshire Hathaway portfolio pay juicy dividends.
Some of those stocks are better choices for investors than others. Here's my pick for the best high-yield Buffett stock to buy right now.
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Several contenders
Berkshire Hathaway currently owns 44 stocks. Nine of them, roughly 20%, offer forward dividend yields of at least 2.58%. This level reflects twice the yield of the S&P 500 and is my threshold for qualifying as a high dividend yield.
Among these high-fielders, Berkshire has the largest stake in Coca-Cola . Coca-Cola ranks as the second largest holding in Buffett's portfolio. Its forward dividend yield is 2.8%. The company is also a Dividend King with an impressive 63 consecutive years of dividend increases.
Bank of America is right behind Coca-Cola as Berkshire's third largest position. The bank stock offers a forward dividend yield of 2.62%, just over the threshold needed to meet my definition of a high yield. Three financial stocks are also in the mix. Ally Financial's forward dividend yield is 3.61%. Citigroup's dividend yields 3.29%, while Jefferies Financial pays a dividend yield of 3.45%.
Coke isn't the only consumer goods stock in Buffett's portfolio with an exceptional dividend yield. Berkshire owns 27.3% of Kraft Heinz. The food maker's forward dividend yield is a lofty 5.41%.
Sirius XM Holdings is arguably Buffett's favorite high-yield dividend stock these days, though. The legendary investor has loaded up on the satellite radio operator in recent quarters. Sirius XM offers a forward dividend yield of 5.06%.
Berkshire owns only $25.4 million worth of Diageo, which amounts to pocket change for Buffett's conglomerate. The alcoholic beverage maker's forward dividend yield is 3.71%.
The best high-yield Buffett stock
None of those contenders is my pick for the best high-yield Buffett stock, however. That honor goes to Chevron (NYSE: CVX).
Why Chevron? First, the oil and gas giant pays a forward dividend yield of 4.92%, enough to make it the third highest-paying dividend stock Buffett owns. Even better, the company has increased its dividend for 38 consecutive years. I fully expect that streak will continue for years to come.
Chevron's shares trade at 14.5 times forward earnings. Although this forward earnings multiple isn't as low as some other Buffett stocks (for example, Sirius XM trades at 7.3 times forward earnings), it's a reasonable valuation in my view.
Most importantly, I view Chevron's business as solid. The company generated earnings of nearly $17.7 billion last year. Its free cash flow totaled $15 billion. Chevron expects to add another $10 billion or so in free cash flow by 2026, leading the industry in growth.
The company remains committed to further stock buybacks. How many shares it repurchases will depend largely on oil prices. However, even with oil priced at $50 per barrel, Chevron thinks it will still be able to deploy capital to buy back shares.
Long-term demand for oil and gas could be better than you might think, even with the rising adoption of renewable energy. Chevron is also positioning itself well for the future with significant investments in renewable fuels, hydrogen, and carbon capture and storage technology.
An iffy near term
If I were only thinking about the near term, I'd probably choose another high-yield Buffett stock such as Coca-Cola. Chevron could face some challenges over the next year or so if the economy stumbles as a result of President Trump's tariffs. Some economists believe tariffs have increased the chances of a recession. A significant economic downturn could negatively impact the short-term demand for oil and gas, which would hurt Chevron's revenue and profits.
However, I prefer to focus on the long term. Chevron should perform quite well over the next decade and beyond, in my opinion. And the company should keep those juicy dividends flowing and growing.
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Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Ally is an advertising partner of Motley Fool Money. Keith Speights has positions in Chevron. The Motley Fool has positions in and recommends Bank of America and Chevron. The Motley Fool recommends Diageo Plc and Kraft Heinz. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Here's My Pick for the Best High-Yield Warren Buffett Stock to Buy Right Now

Constellation Brands (NYSE:STZ) is scheduled to report its earnings on Wednesday, April 9, 2025. For the current quarter, consensus estimates anticipate earnings of $2.27 per share on sales of $2.12 billion. This represents a slight decrease compared to the same period last year, when the company reported earnings of $2.26 per share on sales of $2.14 billion. This modest year-over-year change likely reflects a softening consumption trend, potentially driven by falling consumer sentiment.
This challenging environment may be contributing to the significant 20% decline in STZ stock observed so far this year. While this drop is partly attributable to the broader market downturn, wider economic anxieties appear to be amplifying these concerns. Specifically, President Donald Trump’s recent announcement of sweeping tariffs on goods from over 100 countries has heightened worries about potential negative impacts on the U.S. economy and, consequently, consumer spending. Therefore, the combination of this softening consumer demand and the prevailing broader economic uncertainty creates a challenging outlook for consumer-focused companies like Constellation Brands as they head into their earnings report.
The company has $31 Bil in current market capitalization. Revenue over the last twelve months was $10 Bil, and it was operationally profitable with $3.4 Bil in operating profits and net income of $686 Mil. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might just turn the odds in your favor if you are an event-driven trader. There are two ways to do that: understand the historical odds and position yourself prior to the earnings release, or look at the correlation between immediate and medium-term returns post earnings and position yourself accordingly after the earnings are released. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 75% since its inception.
See earnings reaction history of all stocks
Image by Pexels from Pixabay
Constellation Brands’ Historical Odds Of Positive Post-Earnings Return
Some observations on one-day (1D) post-earnings returns:
There are 19 earnings data points recorded over the last five years, with 7 positive and 12 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 37% of the time.
However, this percentage decreases to 27% if we consider data for the last 3 years instead of 5.
Median of the 7 positive returns = 2.1%, and median of the 12 negative returns =-3.3%
Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
STZ observed 1D, 5D, and 21D returns post earnings
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors. Separately, if you want upside with a smoother ride than an individual stock like Constellation Brands, consider the High Quality portfolio, which has outperformed the S&P, and clocked >75% returns since inception.
Returns
Apr 2025
MTD [1]
2025
YTD [1]
2017-25
Total [2]
STZ Return
-6%
-21%
27%
S&P 500 Return
-10%
-14%
126%
Trefis Reinforced Value Portfolio
-9%
-18%
492%
[1] Returns as of 4/8/2025
[2] Cumulative total returns since the end of 2016
Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

How Will Constellation Brands Stock React To Its Upcoming Earnings?

Diageo plc DEO has encountered a notable resistance level, prompting caution among investors from a technical standpoint. The company is trading below both the 200-day and 50-day simple moving averages (SMAs), suggesting a bearish trend.
Currently, at $107.57, DEO remains below its 200-day and 50-day SMA of $120.9 and $108.52, respectively, indicating a possible sustained downward trend.
DEO faced significant headwinds recently, underperforming the Zacks Beverages - Alcohol industry. In the past three months, its shares have declined 8.3% against the industry's growth of 11.5%, highlighting company-specific challenges.
DEO Stock's Three Month Price Performance
Factors Behind Diageo Stock's Decline
Diageo’s weak stock performance is primarily attributed to soft volume trends across key markets, which have adversely impacted the company's top line. In the first half of fiscal 2025, Diageo reported a 0.6% year-over-year decline in net sales due to macroeconomic headwinds, inflationary pressures and cautious consumer sentiment.
Declines in North America, Europe and LAC due to cautious consumer sentiment amid economic uncertainty and inflationary pressures led to a 0.2% drop in total volume, while organic volume remained flat. North America, Europe and LAC witnessed volume declines of 3.4%, 2.8% and 2.3%, respectively.
Diageo's stock has been negatively impacted by a combination of higher overhead costs, including staff and strategic investments, which have hurt profitability. Additionally, foreign exchange fluctuations have had a significant adverse effect on operating profit. These factors, coupled with lower organic operating profit and a contraction in operating margins, have led to investor concern, contributing to the decline in its stock performance.
Diageo’s performance in Asia Pacific showed signs of weakness, with reported net sales declining by 4% in the first half of fiscal 2025. This was due to a combination of factors, including a drop in organic sales, the disposal of Windsor and a reclassification of certain businesses to Europe. Organic net sales fell 2.6% year over year, largely due to challenging macroeconomic conditions in Greater China, difficult trading environments in Southeast Asia, and the previous year’s replenishment of Shui Jing Fang stocks.
Impact of Tariff on DEO Stock
The newly imposed 25% U.S. tariffs on goods imported from Canada and Mexico pose significant challenges for Diageo, given its reliance on these regions for production, especially for products like tequila and Canadian whisky, which make up approximately 45% of U.S. net sales. These tariffs are expected to increase input costs, which could squeeze margins and force Diageo into difficult pricing decisions, potentially impacting the competitiveness of its products in the United States.
The new tariffs are likely to disrupt Diageo’s supply chain by increasing production and transport costs, causing delays and inefficiencies. They may also lead to retaliatory tariffs from Canada and Mexico, adding further cost pressures. Combined with ongoing currency fluctuations, these issues create more uncertainty for Diageo’s financial outlook.
DEO’s Estimate Revision Trend
The Zacks Consensus Estimate for Diageo’s fiscal 2025 and 2026 earnings per share has declined by 0.5% and 1.5%, respectively, in the last 30 days. The downward revision in earnings estimates indicates that analysts are less confident about the company’s growth potential.
For fiscal 2025, the Zacks Consensus Estimate for AEO’s sales implies a 6.5% year-over-year dip, whereas the EPS estimate indicates a 7% year-over-year decline.
Do DEO’s Strategic Initiatives Hold Potential?
Diageo has been experiencing significant gains from improved price/mix, which have been aiding growth despite soft volume. In the first half of fiscal 2025, organic net sales rose 1% year over year, marking a return to organic sales growth and a sequential improvement from the second half of fiscal 2024. Hence, management expects to continue driving productivity and pricing to offset the cost inflation.
Diageo is refining its $2 billion productivity program to drive efficiency across the business to bring sustainable growth. A key focus is balancing cost savings with strategic reinvestment, particularly in marketing and brand activation. It remains committed to maximizing value while building the right capabilities for success.
DEO’s Investment Strategy
Shares of Diageo have faced notable headwinds, underperforming the broader industry. Elevated costs, foreign exchange fluctuations, soft volume trends and the impact of newly imposed tariffs have all weighed on its performance. However, this does not suggest a lack of long-term potential.
Diageo is actively pursuing strategic initiatives, including a focus on premiumization, improved price/mix and a $2 billion productivity program aimed at driving operational efficiency. These efforts position the company for future growth. While the recent pullback in the stock may present a compelling entry point for long-term investors, margin recovery remains a key concern in the near term. Given these dynamics, DEO currently carries a Zacks Rank #3 (Hold).
Three Stocks Looking Good
Primo Brands Corporation PRMB is a branded beverage company with a focus on healthy hydration, delivering sustainably and domestically sourced diversified offerings across products, formats, channels, price points and consumer occasions, distributed primarily in every state and Canada. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Primo Brands’ current financial-year sales and EPS indicates growth of 146.9% and 57.4%, respectively, from the prior-year levels. PRMB has a trailing four-quarter earnings surprise of 7.2%, on average.
Molson Coors Beverage Company TAP, a global manufacturer and seller of beer and other beverage products, has an impressive diverse portfolio of owned and partner brands. TAP currently flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for Molson Coors’ current financial-year EPS indicates growth of 6.7% from the prior-year levels. The company has a trailing four-quarter earnings surprise of 18.1%, on average.
United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. It currently carries a Zacks Rank of 2 (Buy). UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.
The consensus estimate for United Natural Foods’ current financial-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures.
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Molson Coors Beverage Company (TAP) : Free Stock Analysis Report
Diageo plc (DEO) : Free Stock Analysis Report
United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report
Primo Brands Corporation (PRMB) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Diageo Trades Below 200 & 50-Day SMA: How to Play the Stock?

Below is Validea's guru fundamental report for DIAGEO PLC (ADR) (DEO). Of the 22 guru strategies we follow, DEO rates highest using our Acquirer's Multiple Investor model based on the published strategy of Tobias Carlisle. This deep value model looks for inexpensive stocks that could be potential takeover targets.
DIAGEO PLC (ADR) (DEO) is a large-cap growth stock in the Beverages (Alcoholic) industry. The rating using this strategy is 89% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
SECTOR:
PASS
QUALITY:
PASS
ACQUIRER'S MULTIPLE
FAIL
Detailed Analysis of DIAGEO PLC (ADR)
DEO Guru Analysis
DEO Fundamental Analysis
More Information on Tobias Carlisle
Tobias Carlisle Portfolio
About Tobias Carlisle: Tobias Carlisle is a widely recognized expert on deep value investing. He is the author of "The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market" and the founder of Acquirer's Funds. He is also the author of "Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations" and co-author of Quantitative Value: "A Practitioner's Guide to Automating Intelligent Investment and Eliminating Behavioral Errors" Tobias is originally from Australia, where he worked an an analyst at an activist hedge fund and was a lawyer specializing in mergers and acquisitions.
Additional Research Links
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Ray Dalio All Weather Portfolio
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About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

DEO Quantitative Stock Analysis

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