Goldman Sachs downgraded Diageo Plc stock to sell from neutral on Friday, and said it expects slowing U.S. spirits growth and pricing pressure to rein in growth. In the last three months, U.S. spirits value growth has slowed to 3% from 5% in the 2016 calendar year, analysts wrote in a note. While some of the factors behind the slowdown may be temporary ones, such as delayed tax refunds, price/mix has been slowing since late 2015, they wrote. “Diageo’s price/mix appears to have followed a similar path (now below the market) and yet it has underperformed US growth by 250 basis points (3m average),” said the note. “With the US forming 31% of fiscal 2016 sales, we believe Diageo’s medium-term target of mid-single-digit organic sales growth will be difficult to achieve (GSe: 2.6%, FY17-19), despite better global scotch and emerging market growth.” Diageo shares were down about 1% in London but are up 8% in the year so far. The FTSE 100 has gained 3% in the year to date and the S&P 500 has gained almost 6%.
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