THE Diageo (LSE:DGE) the stock price has fallen about 17% over the past five years. And I’ve reached the point where I’m buying it for my wallet.

Although the stock is at historically cheap levels, there’s no reason it can’t go further. So it’s worth looking into. what analysts expect Diageo shares over the next 12 months.

Price targets

Analysts believe that a significant move in Diageo’s share price over the next month is highly possible. But they disagree on which direction it will take.

The highest price target I could find is 25% higher than where the stock is currently trading, which is quite optimistic. But at the other end, it is 21% lower, reflecting significant risks.

I actually think it makes a lot of sense. Diageo’s business faces a number of actual and potential challenges that are not directly within its control.

If these decline or come to nothing, the company should do well and I expect the stock to rise. But if not, it’s entirely possible that the stock price could fall further.

American rates

The American elections are an important issue. Polls put Donald Trump in the lead and Diageo on a list of 28 European stocks Barclays thinks he could be vulnerable if the Republicans win next week.

Last May, the former president promised/threatened to introduce 20% tariffs on all US imports. And while politicians don’t always do exactly what they say, I think it’s an issue to be taken seriously.

There are, however, a few things to note. The first – and most obvious – is that even though Trump is ahead in the polls, the outcome is by no means a foregone conclusion.

Another reason is that several of Diageo’s main U.S. products are made in countries like Canada and Mexico, where the United States has trade agreements. So the impact may not be as serious as it seems at first glance.

What should investors do?

In this type of situation, it can be difficult for investors to know what to do. And when there’s uncertainty, often the best thing to do is to stay away.

With Diageo, I have a different point of view. While there are some risks that I am unable to accurately predict, I think the stock is worth considering.

The reason is that I think a lot of potential problems are reflected in the current stock price. To a price/earnings ratio (P/E) of 18.5, it’s as cheap as it’s ever been in the last decade.

Diageo 2 P/E Ratio014-24

Created on TradingView

Additionally, the company’s core strengths – the strength of its brand portfolio and the scale of its distribution – remain intact. And I think that’s what will matter in the long term.

Could the stock continue to fall?

It makes sense that the Diageo share price could see a strong move over the next 12 months – up or down. But I’m not trying to predict what will happen here.

I am looking to buy the stock at today’s prices. And if the decline continues, I will probably try to take advantage of an even better opportunity in the future.