What’s Next For Diageo Stock After A 10% Fall In A Month?
Diageo stock (NYSE: DEO) has fallen 10% in a month, while it’s down 22% year-to-date. A high inflationary environment will likely weigh on consumer demand, impacting the retail stocks. The decline in DEO can largely be attributed to the weakness in the broader markets, owing to the rising interest rates, supply chain disruptions, and increasing costs.
Now that Diageo stock has seen a fall of 10% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of a rise for DEO stock over the next month. Of 41 instances in the last ten years that DEO stock saw a twenty-one-day fall of 10% or more, 29 resulted in DEO stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 29 out of 41, or about a 71% chance of a rise in DEO stock over the next month. See our analysis of Diageo Stock Chance of Rise for more details.
Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using the last ten years’ data
- After moving -6% or more over five days, the stock rose on 71% of the occasions in the next five days.
- After moving -6% or more over ten days, the stock rose on 60% of the occasions in the next ten days.
- After moving -10% or more over a twenty-one-day period, the stock rose on 71% of the occasions in the next twenty-one days.
This pattern suggests a higher chance of a rise in DEO stock over the next five days, ten days, and the next month.
Return (Recent) Comparison With Peers
- Five-Day Return: KDP highest at -3.3%; SAM lowest at -9.2%
- Ten-Day Return: KDP highest at 0.6%; SAM lowest at -12.7%
- Twenty-One Day Return: KDP highest at -5.8%; SAM lowest at -14.9%
While DEO stock may see higher levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Keurig Dr. Pepper vs. ACM Research.
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| Returns | Jun 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| DEO Return | -8% | -22% | 65% |
| S&P 500 Return | 0% | -21% | 84% |
| Trefis Multi-Strategy Portfolio | -7% | -25% | 194% |
[1] Month-to-date and year-to-date as of 6/16/2022
[2] Cumulative total returns since the end of 2016