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Diageo's total free cash flow for the
months ended in Dec. 2025 was
€1,296 Mil.
Its total free cash flow for the trailing twelve months (TTM) ended in Dec. 2025 was €2,156 Mil.
Diageo's Free Cash Flow per Share for the
months ended in Dec. 2025 was €0.58.
Its free cash flow per share for the trailing twelve months (TTM) ended in Dec. 2025 was €0.97.
During the past 12 months, the average Free Cash Flow per Share Growth Rate of Diageo was -13.30% per year.
During the past 3 years, the average Free Cash Flow per Share Growth Rate was -12.20% per year.
During the past 5 years, the average Free Cash Flow per Share Growth Rate was -0.50% per year.
During the past 10 years, the average Free Cash Flow per Share Growth Rate was 1.20% per year.
Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.
During the past 13 years, Diageo's highest 3-Year average Free Cash Flow per Share Growth Rate was 100.70% per year. The lowest was -13.70% per year. And the median was 7.80% per year.
Diageo (FRA:GUI) Free Cash Flow Explanation
Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.
In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.
This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is because research shows that five years is the length of the typical business cycle.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.
Diageo Free Cash Flow Related Terms
Diageo Free Cash Flow Historical Data
* Premium members only.
The historical data trend for Diageo's Free Cash Flow can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.
Diageo's Free Cash Flow for the fiscal year that ended in Jun. 2025 is calculated as
Free Cash Flow for the trailing twelve months (TTM) ended in Dec. 2025 adds up the semi-annually data reported by the company within the most recent 12 months, which was €2,156 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Diageo (FRA:GUI) has a Free Cash Flow of €2,156 Mil as of Dec. 2025. Free cash flow represents the total amount of cash a company has on hand following operating and capital expenditures. View historial data for Diageo and its competitors.
Is Diageo's Free Cash Flow too high?
Diageo's current Free Cash Flow is €2,156 Mil. Overall, Diageo has a GF Score™ of 63/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Diageo's Free Cash Flow compare to BF.B?
Diageo's Free Cash Flow of €2,156 Mil can be compared against companies in the Beverages - Alcoholic industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Free Cash Flow for a Beverages - Alcoholic company?
A good Free Cash Flow depends on the Beverages - Alcoholic industry context. However, Free Cash Flow should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Free Cash Flow mean?
A high Free Cash Flow can signal that a stock is expensive relative to its fundamentals. Free cash flow represents the total amount of cash a company has on hand following operating and capital expenditures. View historial data for Diageo and its competitors. Diageo's current Free Cash Flow is €2,156 Mil. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Diageo stock overvalued right now?
Based on GuruFocus' analysis, Diageo (FRA:GUI) is currently considered Significantly Undervalued. The stock's GF Value™ is €27.96, compared to a current price of €18.34 — trading 34.4% below its estimated fair value. The current Free Cash Flow is €2,156 Mil. Diageo's overall GF Score™ is 63/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Free Cash Flow calculated?
Free Cash Flow is calculated from a company's financial statements. For Diageo (FRA:GUI), the current Free Cash Flow is €2,156 Mil as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Diageo (FRA:GUI) Overvalued in 2026?
Based on GuruFocus' analysis, Diageo stock appears to be undervalued.
The current stock price of €18.34 is trading 34.4% below its estimated GF Value™ of €27.96.
GuruFocus considers Diageo to be Significantly Undervalued.
Key valuation signals for FRA:GUI:
Free Cash Flow: €2,156 Mil
GF Value™: €27.96 vs. price of €18.34 (34.4% below fair value)
No single metric tells the full story. See the FRA:GUI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Formed in 1997 through the merger of Grand Metropolitan and Guinness, Diageo is the largest distiller globally by sales. Diageo acquired some of the Seagram assets in 2001, which gave it brands such as Captain Morgan rum and Crown Royal Canadian whisky. Since then, mergers and acquisitions have mostly been bolt-on in nature, plugging gaps in the company's product and geographic portfolio.
63GF Score
Get the complete analysis for FRA:GUI
Free Cash Flow is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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