MeritValue

DIAGEO PLC

DEOdata completeness 88%4 fiscal years on file

Data notes: no data for concept 'capex'; no data for concept 'interestExpense'

The thesis, from the filings

DIAGEO PLC earns about 14% on invested capital, and has bought back 3% of its shares over 4 years. The applicable estimate puts fair value near $18.27 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025
Revenue$29.8B1$28.3B2$27.9B2$28B2
Net income$4.41B3$4.48B4$4.17B4$2.54B4
Operating cash flow$5.21B5$3.64B6$4.11B6$4.3B6
Capital expenditure————
Free cash flow (derived)————
Total debt$17.1B7$19.6B8$21B8$21.9B8
Cash & equivalents$2.77B9$1.81B10$1.13B10$2.2B10
Diluted shares2.50B2.46B2.43B2.43B

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$45.59
your share of equity
Profit it earned you last year
$10.43
Free cash flow it threw off
—
Debt you’d be carrying
$89.84

10 shares is a claim on $45.59 of net worth that earned you $10.43 last year, against $89.84 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
14% avg · 4y
FY22 19%FY23 16%FY24 14%FY25 8%

It earned an average 14% on invested capital over 4 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−3% shares · 4y

Share count is down 3% over 4 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 28% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$18.27
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$4.29B
  • growthAssumed0.0%
Graham Number
$10.41
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 20-F · period ending 2022-06-30 · accession 0000835403-24-000029 (Revenue)
  2. 20-F · period ending 2023-06-30 · accession 0000835403-25-000021 (Revenue)
  3. 20-F · period ending 2022-06-30 · accession 0000835403-24-000029 (ProfitLoss)
  4. 20-F · period ending 2023-06-30 · accession 0000835403-25-000021 (ProfitLoss)
  5. 20-F · period ending 2022-06-30 · accession 0000835403-24-000029 (CashFlowsFromUsedInOperatingActivities)
  6. 20-F · period ending 2023-06-30 · accession 0000835403-25-000021 (CashFlowsFromUsedInOperatingActivities)
  7. 20-F · period ending 2022-06-30 · accession 0000835403-24-000029 (Borrowings)
  8. 20-F · period ending 2023-06-30 · accession 0000835403-25-000021 (Borrowings)
  9. 20-F · period ending 2022-06-30 · accession 0000835403-24-000029 (CashAndCashEquivalents)
  10. 20-F · period ending 2023-06-30 · accession 0000835403-25-000021 (CashAndCashEquivalents)