UBS Maintains a 'Buy' on Pepsico (PEP), Lowers Estimates and Price Target
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Price: $142.08 -0.35%
Rating Summary:
15 Buy, 20 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
15 Buy, 20 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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UBS maintains a 'Buy' on Pepsico (NYSE: PEP) price target lowered from $79 to $72.
UBS analyst says, "We are lowering our estimates and price target for PEP based on decelerating trends in Pepsi’s core businesses and moderating FX tailwinds in 3Q. Our 2011 volume growth estimates are now 4.9% (from 5.6% previously), largely on slowing trends in the North America beverages business, while FX reduces our EPS ests by $0.05 and $0.06 in 2011 and 2012. Our 2011E EPS goes from $4.47 to $4.39 (Street: $4.42)."
"Valuation Presents Upside - Despite the company’s current challenges, we still see fair value of PEP shares above current levels. Our new (lower) price target of $72 represents 18% potential upside. PEP currently trades at a 13pp discount vs. its historical average spread vs. KO (underperforming Coca-Cola (NYSE: KO) shares by 9pp over the past 3 months). A 3.4% dividend yield provides downside support at current levels."
For more ratings news on Pepsico click here and for the rating history of Pepsico click here.
Shares of Pepsico closed at $61.02 yesterday.
UBS analyst says, "We are lowering our estimates and price target for PEP based on decelerating trends in Pepsi’s core businesses and moderating FX tailwinds in 3Q. Our 2011 volume growth estimates are now 4.9% (from 5.6% previously), largely on slowing trends in the North America beverages business, while FX reduces our EPS ests by $0.05 and $0.06 in 2011 and 2012. Our 2011E EPS goes from $4.47 to $4.39 (Street: $4.42)."
"Valuation Presents Upside - Despite the company’s current challenges, we still see fair value of PEP shares above current levels. Our new (lower) price target of $72 represents 18% potential upside. PEP currently trades at a 13pp discount vs. its historical average spread vs. KO (underperforming Coca-Cola (NYSE: KO) shares by 9pp over the past 3 months). A 3.4% dividend yield provides downside support at current levels."
For more ratings news on Pepsico click here and for the rating history of Pepsico click here.
Shares of Pepsico closed at $61.02 yesterday.
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