0712 GMT - Diageo can get back on track by refocusing on its mainstream drinks business, RBC Capital Markets says, lifting its rating on the U.K.-based drinks group to outperform from sector perform. The maker of Guinness beer and Smirnoff vodka--which has appointed veteran Dave Lewis as chief executive--should now lessen its focus on the luxury end of its portfolio, which is an important, but limited, part of the whole," RBC's analysts say. Margins will likely fall this year as the group lowers prices in a bid to boost volumes, but should recover thereafter, they say. "We think that reviving the neglected mainstream is the key to Diageo rediscovering sustainable volume growth," the bank says, keeping a 20-pound target price on Diageo stock. Shares last closed at 16.34 pounds. (joshua.kirby@wsj.com; @joshualeokirby)

(END) Dow Jones Newswires

January 06, 2026 02:12 ET (07:12 GMT)

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