Broker snap: Nomura has a taste for spirits

6th Jan 2010 10:52

In a spirited note on the European liquor industry, Nomura has raised its target price on Diageo to 1,300p from 1,150p.Nomura has a 'neutral' rating on the drinks sector, but prefers spirits over beer on valuation grounds.'Beer stocks outperformed spirits stocks in 2009 by a significant margin, and we think this outperformance will shift in 2010 as the near-term outlook for spirits improves,' the broker said.It says it expects Diageo, which supplies a range of spirits as well as Guinness, to see 'improved news flow' in 2010.In soft drinks, meanwhile, Nomura says that juice group Britvic 'offers revaluation potential as well as upside from future M&A activity in soft drinks.'