The Diageo (LSE: DGE) share price decline has been an absolute shocker. Once considered one of the most solid FTSE 100 stocks of all, it’s gone into meltdown. The spirit giant’s shares are down 51% over five years, and 31% over 12 months. Just when investors think it’s about to stage a rally, it’s hit by get more bad news. But could that change on Wednesday?

Investors have been knocked flat by a poisonous cocktail of bad news. It started with dwindling sales in Latin America & the Caribbean, and extended to inventory issues, the cost-of-living crisis, US tariffs, Gen Z abstinence and plunging volumes in the Chinese white spirits market. The only bright spot has been the success of Guinness, which suddenly became the number one tipple among influencers, but otherwise it’s been a real downer. Well they do say alcohol is a depressant.

Can things only get better from here?

Diageo has given investors one pick-me-up, with the appointment of recovery expert Sir Dave Lewis, the man who saved Tesco in its hour of need. Appointed on 1 January, Lewis made the cunning long-term strategic decision of bombarding investors with bad news in first-half results on 25 February, lowering full-year guidance and slashing the dividend in half.

My hope is that ‘Drastic Dave’ was deliberately deflating expectations, in the hope of building them up later. We may get a better idea on 6 May, when Diageo unveils its Q3 trading update. So what can we expect?

The shares have been rising in anticipation, edging up 6% in the last month. That could signal the first stirring of investor optimism, but we’ll see. Personally, I think we may have to wait a little longer for some solid gains. Lewis has a big job on his hands. He’ll take time to get it right.

Also, the market remains tough, as the cost-of-living crisis rears its ugly head once more. Rising petrol prices won’t help, making drinkers poorer and increasing transportation costs.

How brave would someone have to be to buy?

Investors will be looking for good news on free cash flow, which dropped by $200m in Q3 to $1.5bn, and on plans to pay down some of its net debt, now a hefty $21.7bn. Those are long-term challenges, but a few disposals could speed things along.

I bought Diageo the after the initial profit warning in November 2023. Despite averaging down subsequently, I’m sitting on a 40% loss. Any investor approaching Diageo today must accept that it isn’t the no-brainer buy of yore. Maybe alcohol won’t hold the same place in our hearts as it did before. Those GLP-1 weight loss drugs could play a part in that too. On the other hand, it has been through hard times before, and recovered nicely. It’s in a cyclical sector.

There are major advantages in buying a recovery stock before the good news lands, rather than afterwards. The shares look good value with a forward price-to-earnings ratio of around 11.5. That’s roughly half the 10-year average of around 22. I expect Lewis to work his magic one way or another, but buyers either have to be very brave or maybe need a stiff drink or two while they wait.