Down 9% in 10 years, could this FTSE 100 stock be a once-in-a-decade buying opportunity?

FTSE 100 drinks big Diageo (LSE:DGE) has seen its share value carry out miserably over the previous few years. Since reaching its post-pandemic peak in December 2021, it’s fallen round 60%.

However with a brand new boss on the helm, will the group’s outcomes begin to present that its turnaround technique is working? What’s extra, might the drinks big be one of many UK’s prime restoration shares in 2026? Let’s see.

What’s occurring?

Diageo’s woes look like linked to a change in ingesting habits. After Covid, when folks began going out and about once more, the group skilled a rise in volumes. However then, issues started to alter.

Price of residing pressures led to a minimize in shopper discretionary spending. And provide chain value will increase harm its margin. Extra just lately, tariffs have been damaging.

However there’s additionally some proof that members of Era Z are ingesting lower than their mother and father. As the corporate itself acknowledges: “Individuals are ingesting higher, no more”. And a current NHS survey reveals that 39% of younger males have abstained from alcohol over the previous yr. This compares to 16% of males aged over 65. It’s the same image for ladies.

Individuals are additionally buying and selling up. In response to the group, the share of “premium and above” spirits grew from 26% to 35% over the previous 10 years. And the “super-premium-plus tier” has grown 50% sooner than different sub-groups.

A unique strategy

Early in 2025, the group mentioned it needs to scale back the variety of manufacturers in its portfolio. This looks as if the appropriate technique to me. I feel the group ought to concentrate on searching for to copy the success of Guinness — which has turn into trendy by means of the revolutionary use of social media — with its different 12 so-called billion-dollar manufacturers.

Fortuitously, that is proper up the road of the group’s new boss, Sir Dave Lewis. Throughout 33 years at Unilever, ‘Drastic Dave’ decreased the variety of the group’s merchandise from 1,600 to 400. If he can do the identical at Diageo, it ought to release some a lot wanted money to assist cut back the group’s vital debt pile.

However regardless of its issues, the group stays primary in worldwide spirts by retail gross sales worth. This implies it’s properly positioned to develop once more if circumstances enhance. After all, nothing’s sure. The group could also be too giant to reply shortly sufficient to the altering market. And a slowing international financial system might additional affect demand.

However one of many advantages of a falling share value is that these taking a stake now may gain advantage from a yield of 4.6%. I say ‘might’ as a result of dividends can’t be assured and, if gross sales and earnings proceed to go within the mistaken route, there’s a powerful probability its payout shall be minimize.

Closing ideas

Personally, I don’t suppose shareholders must be — excuse the pun — too dispirited. It has many internationally well-known manufacturers and I feel it has the appropriate particular person on the prime to supervise a bounce again.

Positively, analysts from MCH Market Insights, Interactive Investor, and AJ Bell have all recognized Diageo as their prime restoration inventory for 2026.

Though there might be some hiccups alongside the best way, with its share value at a 10-year low, I feel Diageo might be a once-in-a-decade alternative to think about.