Bernstein is turning bullish on Diageo. Analysts Trevor Sterling upgraded Johnnie Walker and Keitel One Parent to Outperform the market. He also raised his price target on the company’s US-listed shares from $215 to $225. The new target represents about 30% upside from Friday’s close. “They are well positioned to benefit from long-term structural growth in US spirits and great momentum in emerging markets (primarily spirits in LATAM and Asia but also in pockets of Africa). We believe they will deliver on the upper end. In their long-term guidance of 5%-7% organic top-line growth with operating profit growth, Sterling said in a Monday note. The US spirits market experienced extraordinary growth broadly during the COVID lockdown, leading it to Yet Sterling said Diageo’s business remains ahead of pre-pandemic earnings. Europe is up 26% from pre-Covid levels, and Latin America is up 72% in sales and 100% in profits To be sure, Bernstein noted that despite the alcoholic beverage maker’s strong underlying performance, the stock’s multiple has de-rated compared to competitors and the market. Potential headwinds ahead include a recession in Europe, a surge in the pandemic. normalization in the US spirits market after, and in the second half of the year a Includes the possibility of a CEO handoff. However, Sterling remains optimistic about the company’s outlook. “We believe the current uncertainties make this a good entry point into a great LT growth story and upgrade to outperform,” the analyst added. Diageo’s US-listed shares are down slightly today. However, they have fallen 14.7% over the last 12 months. —Michael Bloom of CNBC contributed to this report.