Alcoholic beverage company Diageo will see limited upsides ahead, says Goldman Sachs. Analyst Oliver Nicolaï downgraded shares to neutral from buy. He also lowered his price target to $186.48 from $217.80, implying 7.9% upside from Wednesday’s close. “We believe Spirits demand is resilient into a potential downturn and the long-term structural equity story of Diageo remains attractive, with strong brands, a leadership position in Scotch, Gin and Tequila and an attractive geographic footprint,” Nicolaï wrote in a Thursday note. “However, as we expect a prolonged normalization in the U.S. spirits market, which accounts for 35% of sales and 43% of EBIT in FY23e, we see limited positive catalysts for the shares,” he continued. The analyst noted that even without having factored in a recession into his forecasts for Diageo, he anticipates lackluster sales growth in 2023 and 2024. “With muted growth in the US, we see limited positive catalysts for Diageo and thus limited scope for earnings upgrades for the group,” said Nicolaï. To be sure, he noted that if the company’s U.S. market share gains accelerated, the company could strongly outperform the rest of the market. Goldman expects negative worsening volume trends and a weaker pricing outlook for U.S. spirits wholesalers over the next six months. The firm noted that “the secular premiumization trend is expected to be on hold after strong gains in 2020–2022.” Diageo’s U.S.-traded shares were down 0.2% Thursday during premarket trading. The stock has declined 3% year to date. —CNBC’s Michael Bloom contributed to this report.