Deutsche Bank Downgrades Dr Pepper Snapple (DPS) to Hold on Valuation, as Catalysts Get Tougher

Deutsche Bank downgraded Dr Pepper Snapple (NYSE: DPS) from Buy to Hold.

Deutsche analyst says, "DPS retains good long-term opportunity to expand brand penetration, is aggressively managing costs, and management strongly committed to returning cash. However we are moving to a neutral stance as recent strength brings the stock close to fair value (14.4x, 9x EBITDA), with only 3% upside to $40 target. We now see more exposure to surging commodity prices as 2011 progresses (lowering estimates), category growth is still sluggish, and competitive environment could heat up...We are lowering EPS (2011 from
$2.74 to $2.68) on this basis, but it may also hinder top-line growth, arguably the most important stock driver."

For more ratings news on Dr Pepper Snapple click here and for the rating history of Dr Pepper Snapple click here.

Shares of Dr Pepper Snapple closed at $38.66 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Deutsche Bank Downgrades Qifu Technology (3660:HK) (QFIN) to Hold
• Deutsche Bank Downgrades AtaiBeckley Inc (ATAI) to Hold
• Barclays Downgrades Murphy Oil Corp. (MUR) to Underweight