EUROPEAN BEVERAGES: We raise our FY17-18 EPS estimates for Diageo and Pernod by 10/12% and 2%, respectively, driven by a weaker sterling, partly offset by small underlying downgrades. We lower our Heineken and CCH EPS by c2-3% reflecting the recent Naira weakness and corresponding negative impact on volumes. Elsewhere, our estimates are broadly unchanged. We continue to prefer spirits over the brewers on a 12m view. We believe Pernod can surprise positively on margins, which could lead to improved sentiment on the stock. Diageo has moved 17% since the Brexit vote; however, it has not re-rated versus the staples sector (+3%), given underlying FX upgrades of c14%.