UBS Raises Price Target on PepsiCo; Cuts Earnings Estimates (PEP)

UBS Raises Price Target on PepsiCo; Cuts Earnings Estimates (PEP)


UBS reported on Tuesday that they have increased their price target and lowered their EPS outlook on beverage producer, PepsiCo, Inc.(PEP).

The firm, which currently has a “Neutral” rating on PEP, has raised the company’s price target from $71 to $75. This price target suggests that the stock will remain flat at its current price of $75.30.

Although the firm raised their price target on PEP, analysts have reduced their EPS outlook for the company. Earnings for FY2013 are now expected to be $4.31, down from the prior estimate of $4.42. FY2014 EPS is expected to be in the range of $4.74 to $4.69. The EPS consensus for FY2013 is $4.40 and $4.78 for FY2014.

An analyst from the firm commented, “after rebasing earnings in 2012 by increasing spending around brand-building marketing and activation, Pepsi expects to return to EPS growth in 2013. However, as spending levels remain high, outsized earnings potentialappears limited.”

Pepsi shares were up $1.63, or 2.21% during Tuesday afternoon trading. The stock has increased 20% in the past year.

The Bottom Line
Shares of PepsiCo, Inc.(PEP) have a 3.01% yield, based on Tuesday afternoon’s price of $75.30.

PepsiCo, Inc.(PEP) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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