We believe consensus depreciation estimates are materially too low From FY14-21 Diageo''s capex/DandA ratio averaged 1.42. From FY22-24 this ratio has jumped to 2.26 as the company embarked on many expansion projects. Much of this capex has not yet begun depreciating (sitting in assets under construction). As it does, we expect depreciation to catch-up. Our FY26/27e DandA estimates are 17%/23% above co. cons. FY26e North America consensus estimates are still materially too high Consensus looks for a FY26e LFL sales decline in North America (NAM) of -0.4% (BNPPEe -2.7%) and LFL EBIT growth of +0.2% (BNPPEe -3.2%). We view this as very optimistic given Diageo''s prevailing US spirits sell-out trend (-4.3% sales per Nielsen; -4.0% vols per NABCA in cal. Q2). We expect further pressure on consensus top and bottom-line estimates Taking the above factors together, we look for FY26e group LFL sales growth in very modest positive territory at +0.3% (co. cons. +1.8%) and our FY26e EPS sits -7.5% below. We see no incentive for the company to raise expectations ahead of CEO appointment We see no incentive for Diageo to raise expectations ahead of the appointment of a permanent CEO. It is not impossible that Diageo guides for a FY26 LFL sales decline with this in mind. We reiterate our Underperform rating. TP to GBp1,660 (roll forward of earnings base) We are cognisant that sentiment on the stock is negative (see here) and positioning has been a big factor in recent Staples post earnings share price reactions. However, while consensus estimates are subject to downgrades we do not foresee a sustained turnaround for the stock. We reiterate our Underperform rating and would reduce exposure if there is a rebound based on positioning unwind at results next week (5th August).