For a stock that has been disliked for so long, Diageo (LSE: DGE) shares have been in great form recently. Anyone buying a stake six months ago would be looking at a gain of 21% today. As I type, that’s over five times what the FTSE 100 has achieved over the same period.

Will we see this trend continue in November? I can think of a few reasons why this might happen.

The shares are popular again

A lot of the recent positive momentum in the premium spirits maker can probably be attributed to investors liking the turnaround plan of CEO Dave Lewis. In August, the former Tesco leader announced a restructuring programme to save over $1bn in three years and invest the money saved on innovation to make the company more competitive.

Other developments have provided an extra boost. Earlier in October, the share prices of Diageo and peers Rémy Cointreau and Pernod Ricard all rose. This was seen as a response to news that luxury giant LVMH achieved better-than-expected sales of wines and spirits in its third quarter.

All this means the market will be very interested in the firm’s next trading update. This is due on 5 November and, barring no wider market moves, could decide the general direction of travel for a while.

If there are signs that demand in North America hasn’t worsened, that full-year targets have been maintained and that margins are holding up, the reaction could be very positive.

What might put a cork in the recovery?

Of course, there’s no sure thing in investing. While it’s reasonable to think that the shares might continue rising next month, there are still other concerns. To make matters worse, these are beyond the company’s control.

For one, we need to add UK inflation to the discussion. This moved to 3.5% in September, from 3.1% in August. If this keeps creeping upwards, it’s possible that sales of branded spirits could fall as shoppers seek out cheaper alternatives, or reduce their consumption.

Another thing to ponder is evolving attitudes to alcohol. These days, younger generations seem more concerned with health and fitness. That’s clearly a good thing. But it does place a question mark over whether Diageo can fully recapture and retain its mojo for the long term. This is, after all, the time horizon that we’re most interested in.

All aboard to £20?

Taking everything into account, I reckon a 12% jump in Diageo shares in November isn’t beyond the realms of possibility. A valuation of 14 times earnings still looks reasonable and could generate significant buying activity if the outlook statement is even slightly better than anticipated.

Nevertheless, it’s clear that Sir Dave still has a lot of work to do. Cutting costs can only achieve so much. To really show the company has turned a corner, there needs to be evidence of sales stabilisation and eventual growth.

Still, I tip my hat to anyone who recently snapped up the stock. So far, this has been a great example of how buying when most won’t has the potential to pay off handsomely.

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Paul Summers has no position in any of the shares mentioned.