From an investing perspective, I believe there’s a lot to love about drinks maker Diageo (LSE: DGE). The previous 5 years have seen the Diageo share price fall considerably. That made it attractively sufficient priced for me so as to add it to my portfolio just a few months in the past.

With a buying and selling announcement at the moment (26 September), one of many issues that I really feel has been dogging the inventory has had some extra mild forged on it.

Full steam forward?

The funding case for Diageo is pretty simple.

Globally, the marketplace for alcoholic drinks is substantial and prone to stay that means. Diageo is well-positioned to learn from that, due to its assortment of premium manufacturers equivalent to Johnnie Walker and Smirnoff. That offers it pricing energy and in flip helps it earn substantial earnings. It’s no coincidence that the corporate is a Dividend Aristocrat, having grown its shareholder payout yearly for over three a long time.

Nevertheless, fears have been rising within the Metropolis a few potential slowdown for the enterprise in a weak international financial system. Weakening efficiency in Latin America has helped ship the Diageo share price downwards. That raised the query of whether or not different markets may be in line for softer efficiency.

In at the moment’s assertion, the corporate reassured the market that, “Our expectations are unchanged from when we reported our… preliminary results on 30 July 2024. The global environment remains challenging for both our industry and Diageo”.

Reassuring – up to a degree

At floor degree, that sounds fairly good.

Expectations stay the identical and issues haven’t been getting worse for the enterprise.

On nearer examination, although, it’s only mildly reassuring for me. In any case, the corporate is affirming expectations it laid out lower than two months in the past. For a enterprise of Diageo’s sophistication, I might be dissatisfied if its newest monetary expectations weren’t nonetheless consistent with such a current forecast.

Added to that, though the enterprise stated it has been making “good progress” on strategic initiatives equivalent to enhancing the way it distributes its merchandise in the important thing US market, the truth that Diageo underlined that the setting stays difficult strikes a word of warning for me. That would set the scene for extra troubles additional down the road.

On the lookout for worth

For years I appreciated the enterprise however not the share price. Difficult circumstances for the enterprise pushed the Diageo share price down this yr to a degree the place I felt it supplied worth.

On one hand, sustaining the market’s expectations might present a motive for the share to show upwards from right here. Certainly, as I write this on Thursday morning, Diageo has moved up 5% in early buying and selling.

On the opposite, the underlying challenges sound as in the event that they haven’t gone away.

That would imply the shares proceed to maneuver decrease over time. As a long-term investor, I proceed to see actual worth within the funding case and suppose the present Diageo share price is affordable. I plan to carry.