UBS Maintains a 'Neutral' on Dr Pepper Snapple (DPS); Operationally Stronger than Expected

UBS maintains a 'Neutral' on Dr Pepper Snapple (NYSE: DPS), raises PT from $37 to $40.

UBS analyst says, "With margin pressure expected in 2011, in particular in 2Q, we see limited near-term operating growth. However, today’s commentary around expected volume (+1-2%) and pricing (+2.5%) leads us to believe gross profit will be slightly better than expected. We now estimate net sales growth will be 4.6% for 2011 on 1.8% volume growth. With COGS inflation of 7%, we are projecting 4.5% net income growth. Share repos of $400m ($500m for 2011) will lead to 14% est EPS growth."

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 $40.06 yesterday.

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