Broker snap: Investec upgrades Diageo to buy

20th Jan 2012 11:04

Investec has upgraded its rating on drinks giant Diageo from hold to buy ahead of the group's first half results due in a few weeks."For us, Diageo represents what is an increasingly scarce asset in UK investing - a global leader in branded consumer goods," writes analysts Martin Deboo and Gideon Adler."There is a once in a decade opportunity to unlock inorganic value. And possible incipient leadership change is a potential catalyst. Despite strong relative performance in H2 2011, we see this as a 'growth defensive' with sound growth prospects and remaining room to re-rate," they said.Investec raises its target price to 1,700p.Diageo, the company behind such brands as Guinness, Red Stripe and Baileys, reported back in October that first quarter sales grew by 9% and forecasts first-half growth ahead of the previous year.Shares were up 1.85% at 1,406.5 in mid-morning trade on Friday.BC