The Diageo (LSE: DGE) share price is up another 1.82% today (13 December). Yesterday, it jumped 2.77%. Over the last month, it’s climbed 11.89%. And I couldn’t be happier.

I’ve tracked and reviewed Diageo more than almost any other FTSE 100 stock this year, and it’s mostly been a gloomy experience. I bought the global spirits giant on 24 November last year, two weeks after it had issued a profit warning following a slump in sales in Latin America and the Caribbean, allied to inventory issues.

I saw this as a brilliant opportunity to buy its shares at a discount, but as I’ve discovered on several occasions this year (think Aston Martin, Burberry Group and JD Sports Fashion), a profit warning may only be the start of a company’s woes. I’ve learned my lesson.

Will this FTSE 100 stock continue to recover in 2025?

Diageo’s shares are still down 31.35% measured over two years and 8.95% over one. The market mood’s shifted and so has mine.

On 8 November, I said I was thinking of dumping Diageo. I wrote: “Should I sell? As a long-term buy-and-hold investor, that would be against my principles. Plus sod’s law says the moment I do sell its shares will rocket.”

Thankfully, I didn’t sell. A combination of sound investment principles and superstition saved me. It was a close call though.

Yesterday’s surge followed a double upgrade by broker UBS, which lifted its view from Sell to Buy, skipping the Neutral/Hold stage in between. It also hiked its price target from 2,300p to 2,920p.

Right now, Diageo shares cost 2,605.5p. That would suggest growth of 26.95% from here, if correct. I fancy having some of that.

This blue-chip share still looks good value to me

UBS analysis shows that Diageo’s “significantly outperforming a still weak spirits industry, and the strong growth momentum behind key brands Don Julio and Crown Royal can be sustained”. I’ll drink to that.

UBS also reckons Diageo’s reaching the end of its earnings downgrade cycle, and I’ll drink to that too.

It still has destocking issues, apparently, and shipments to the key US market remain “flattish” but a good Christmas could add further sparkle.

Risks remain. As the cost-of-living crisis drags on drinkers may continue to trade down from Diageo’s premium offerings. Some may develop a taste for the rough stuff and stick with it once the recovery hits.

Also, Gen Z worries me, as younger folk sensibly drink less. However, Diageo has a secret weapon here, in the shape of super-fashionable Guinness and a truly tremendous alcohol-free alternative Guinness 0,0.

Diageo’s price-to-earnings ratio has crept up to 18.36. That’s above the FTSE 100 average of 15.58 times, but still relatively modest by its former standards. The only thing stopping me buying more Diageo shares today is that I already have a pretty large tot of them. So I’ll just say ‘bottom’s up’ and toast the next leg of the potential recovery.