Diageo Sinks 2% As It Warns On Coronavirus
Fiona Cincotta February 26, 2020 9:23 AM
Diageo drops on coronavirus hit to profits
There is no hiding from the coronavirus, and it appears few industries are safe from the reaches of the killer virus.
Diageo is the latest to warn on the impact of coronavirus. The world’s biggest spirits maker warned today that the coronavirus outbreak is expected to knock £200 million off operating profits this year, which equates to roughly 5%.
Consequently, net sales are now expected to take a hit in the region of £225 to £235 million. The stock is down 1.9% today and 4.75% so far this week.
Diageo have said that they expect the disruption until at least until the end of March. They expect normal trade to resume by June when it expects sales to return to normal levels. Whilst the spread of coronavirus is showing signs of slowing in China, it is picking up across the rest of Asia and the world. Given that we are according to many scientists on the cusp of a pandemic, these forecasts could be a little bullish from Diageo.
Diageo is trading at an 11-month low, below its 50, 100 and 200 sma, with bearish momentum.
Support can be seen at 2830 (30th Jan ’19 low) prior to 2790 (low 4th March’19).
Resistance can be seen at 2937 (today’s high) prior to 3029 (yesterday’s high) and 3069 (Monday’s high).
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