Despite the challenges created by the apparent slowdown in the global economic environment, we've been saying that Diageo (DGE) is positioned well due to its unrivaled distribution scale, strong brand portfolio, and exclusive distribution agreements in the U.S., which played out in fiscal 2011. The firm's full-year results came in about where we expected, and we are not making any changes to our fair value estimate for the firm, but we will update our outlook when we've had a chance to dig into the full-year results.
Overall, Diageo's results stood in stark contrast to what we've heard recently from Heineken (HEIA) and Carlsberg (CARL B), which have both been plagued by weaker consumer demand. In our view, this supports our take that as the largest global spirits manufacturer, Diageo maintains a leg up on the competition by owning a broad portfolio of strong brands which it leverages to gain shelf space and negotiate pricing with retailers.
This is an excerpt from the Morningstar Analyst Report on Diageo. Read the full report here. Morningstar Research is available to Premium subscribers. Find out more about Premium here.
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