Why did Diageo cut its interim dividend to 20c?

Management prioritized financial flexibility as demand softened in the United States and China. Linking payouts to 30–50% of earnings helps preserve cash while the company focuses on volumes, mix, and inventory normalization. The move aims to protect the balance sheet through a slower trading period without overcommitting to a fixed cash distribution.

How severe is the Diageo guidance cut for FY2026?

The company now sees sales down 2–3% in FY2026, reflecting weaker trends in key markets. It is not a collapse, but it does mark a slower path than investors hoped. Recovery depends on de-stocking progress, consumer trading patterns, and the ability to support brands without sacrificing margins.

What is the new Bernstein price target for Diageo?

Bernstein lowered its target to 2,340p and kept an Outperform rating. The target is quoted in pence as the shares trade in London. We see targets as helpful context, not a forecast. Execution on cost control, demand stabilization, and cash flow will drive whether the stock can close that gap.

What should German income investors watch after the Diageo dividend change?

Focus on the payout ratio within the 30–50% range, free cash flow trends, and pricing versus volume. Consider currency exposure since dividends and prices are in GBP. UK dividends currently face no withholding tax for non-residents, but FX can sway euro income. Diversify sources so a single cut does not hit cash flow.

Global Market Insights

DGE.L Stock Today: Dividend Halved as Outlook Cut – February 26

ByDanny Kontos February 26, 2026February 26, 2026

Diageo dividend moves took center stage today after the group halved its interim payout to 20c and reset its payout policy to 30–50% of earnings. Management also guided FY2026 sales down 2–3% on softer demand in the United States and China, a setback for premium spirits. We assess how this hits income strategies in Germany and what the Bernstein price target cut to 2,340p means for DGE.L and portfolio positioning.