Deutsche Bank upgraded Diageo Plc on Monday to 'hold' from 'sell' as it said that its unchanged price target of 2,020p now suggests just 6.6% downside.
The bank noted that since it downgraded the drinks company to 'sell' on 29 June 2022, the shares have fallen 42%, underperforming the Stoxx Europe 600 food and beverage index by 31%, the Stoxx Europe 600 by 55% and the FTSE 100 by 52%.
"As we have argued throughout, we believe Diageo is fundamentally one of the best positioned companies in European Staples," Deutsche said.
"However, we believe this is broadly balanced by a combination of near term risks and potential structural headwinds at this level."
At 1038 GMT, the shares were down 0.5% at 2,152p.