TGM's two-stage DCF values Diageo plc (DEO) between $70.04 and $157.39 depending on assumptions, with a base case of $99.60. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (floored at 2%)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$84.75 is justified only if free cash flow grows about -0.7% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $70.04 |
| Base case | 2.0%/yr | 7.5% | $99.60 |
| Optimistic | 5.0%/yr | 6.5% | $157.39 |
| Third-party model estimate (FMP) | independent reference · retrieved Oct 2, 2026 · assumptions not provided | $192.87 | |
The FMP figure is a third-party point estimate. Its cash-flow forecast, discount rate, terminal growth, and valuation date are not included in the stored response, so TGMCharts presents it only as a reference—not as an intrinsic-value conclusion or price target.
Current Price
$84.75
Market-Implied Growth
-0.7%/yr
vs -5.3% 5Y actual
Model Scenario Range
$70.04 – $157.39
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for DEO (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $3.8B · 0.56B shares · net debt $20.1B
Estimated Fair Value
$99.60
+17.5% vs $84.75
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $84.75; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $139 | $161 | $190 | $230 | $291 |
| 6.5% | $104 | $117 | $133 | $154 | $182 |
| 7.5% | $80.78 | $89.34 | $99.60 | $112 | $128 |
| 8.5% | $64.02 | $70.03 | $77.02 | $85.28 | $95.18 |
| 9.5% | $51.46 | $55.87 | $60.90 | $66.69 | $73.44 |
