Credit Suisse Group Lowers Pepsico, Inc. (PEP) to Neutral
Pepsico, Inc. (NYSE:PEP) was downgraded by Credit Suisse Group from an “outperform” rating to a “neutral” rating in a research report issued to clients and investors on Friday, Marketbeat Ratings reports. They currently have a $124.00 price objective on the stock. Credit Suisse Group’s target price suggests a potential upside of 7.79% from the stock’s previous close.
The analysts wrote, “total beverage company” portfolio with product lines ranging from carbonated drinks to juices and Gatorade, Grandet commented in the downgrade note. While this did help to boost PepsiCo’s stock higher of the year, including an 11 percent gain over the past year, the stock’s risk to reward profile is now balanced.PepsiCo’s total U.S. beverage retail sales trends “deteriorated significantly” since the start of 2017. While many investors assume that this could be attributed towards a trend in healthier consumer habits at the expense of carbonated drinks, the fact is the company’s non-carbonated beverage portfolio is in decline. In fact, the NBC’s weakness is no longer able to compensate for the greater weakness in the carbonated category.On top of that, PepsiCo’s snack and food division was historically called on to compensate for weakness in the beverage business, the analyst continued. However, it is now a “stretch” to assume that Frito-Lay and other snack categories will “over-earn for an extended period of time.”
A number of other brokerages have also weighed in on PEP. Jefferies Group LLC reaffirmed a “buy” rating and set a $133.00 target price (up previously from $130.00) on shares of Pepsico in a research note on Wednesday, July 12th. BidaskClub lowered shares of Pepsico from a “buy” rating to a “hold” rating in a research note on Saturday, July 1st. Zacks Investment Research raised shares of Pepsico from a “hold” rating to a “buy” rating and set a $132.00 target price on the stock in a research note on Tuesday, August 22nd. Royal Bank Of Canada reaffirmed a “hold” rating and set a $115.00 target price on shares of Pepsico in a research note on Thursday, May 25th. Finally, Stifel Nicolaus reaffirmed a “hold” rating on shares of Pepsico in a research note on Wednesday, May 31st. Six analysts have rated the stock with a hold rating, twelve have given a buy rating and one has assigned a strong buy rating to the company. Pepsico currently has an average rating of “Buy” and a consensus price target of $123.47.
Shares of Pepsico (PEP) traded down 1.67% during mid-day trading on Friday, reaching $115.04. 4,818,344 shares of the company’s stock were exchanged. Pepsico has a one year low of $98.50 and a one year high of $119.39. The stock has a market cap of $163.99 billion, a PE ratio of 24.36 and a beta of 0.68. The company has a 50 day moving average price of $116.69 and a 200-day moving average price of $114.37.
Pepsico (NYSE:PEP) last released its quarterly earnings data on Tuesday, July 11th. The company reported $1.50 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.40 by $0.10. Pepsico had a net margin of 10.77% and a return on equity of 59.74%. The firm had revenue of $15.71 billion for the quarter, compared to analysts’ expectations of $15.57 billion. During the same quarter in the previous year, the company earned $1.35 earnings per share. The company’s revenue for the quarter was up 2.0% compared to the same quarter last year. On average, analysts predict that Pepsico will post $5.15 EPS for the current year.
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In other news, Chairman Indra K. Nooyi sold 452,830 shares of the company’s stock in a transaction that occurred on Tuesday, July 25th. The shares were sold at an average price of $116.44, for a total value of $52,727,525.20. Following the transaction, the chairman now owns 733,315 shares in the company, valued at $85,387,198.60. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, EVP Mehmood Khan sold 63,396 shares of the company’s stock in a transaction that occurred on Monday, July 24th. The stock was sold at an average price of $116.39, for a total transaction of $7,378,660.44. Following the completion of the transaction, the executive vice president now owns 174,273 shares in the company, valued at approximately $20,283,634.47. The disclosure for this sale can be found here. Insiders have sold 898,164 shares of company stock worth $104,585,929 in the last three months. 0.26% of the stock is currently owned by insiders.
Hedge funds and other institutional investors have recently modified their holdings of the company. Leith Wheeler Investment Counsel Ltd. bought a new position in shares of Pepsico in the first quarter worth approximately $157,000. National Pension Service lifted its stake in shares of Pepsico by 2.0% in the first quarter. National Pension Service now owns 945,000 shares of the company’s stock worth $106,010,000 after buying an additional 18,835 shares in the last quarter. Univest Corp of Pennsylvania lifted its stake in shares of Pepsico by 0.7% in the first quarter. Univest Corp of Pennsylvania now owns 2,350 shares of the company’s stock worth $263,000 after buying an additional 17 shares in the last quarter. Confluence Investment Management LLC lifted its stake in shares of Pepsico by 6.6% in the first quarter. Confluence Investment Management LLC now owns 1,044,002 shares of the company’s stock worth $116,782,000 after buying an additional 64,837 shares in the last quarter. Finally, Hays Advisory LLC lifted its stake in shares of Pepsico by 11.6% in the first quarter. Hays Advisory LLC now owns 2,244 shares of the company’s stock worth $251,000 after buying an additional 233 shares in the last quarter. Hedge funds and other institutional investors own 70.16% of the company’s stock.
PepsiCo, Inc is a global food and beverage company. The Company’s portfolio of brands includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. The Company operates through six segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), North America Beverages (NAB), Latin America, Europe Sub-Saharan Africa (ESSA), and Asia, Middle East and North Africa (AMENA).
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