Deutsche Bank Trims Numbers on Coke and Pepsi as Soft Drink Consumption Slows (PEP, KO)
On Friday analysts at Deutsche Bank cut the 2013 volume and EPS estimates on The Coca-Cola Company (KO) and PepsiCo., Inc. (PEP) as global soft drink consumption growth has slowed.
The analysts maintained a “Buy” rating for both KO and PEP. The firm sees shares of Coke reaching $42, a +12% upside to Friday’s opening price of $37.49. Furthermore, Deutsche Bank values shares of Pepsi at $75, a +3.8% upside to Friday’s opening price of $72.22
Deutsche Bank lowered KO 2013 volume growth from 4.5% to 3.5% and lowered 2013 EPS estimates from $2.18 to $2.15.
PEP had its volume growth estimate cut from 3.5% to 2.3% while 2013 EPS was lowered from $4.41 to $4.36.
Coke and Pepsi shares were down slightly during morning trading on Friday. Over the past year the stocks are up +10.62% and +11.38%, respectively.
The Bottom Line
Shares of Coca-Cola (KO) have a 2.73% dividend yield, based on the latest intraday stock price of $35-$36 price area. If the shares can firm up, we see overhead resistance around the $39-$40 price levels. Shares of Pepsico (PEP) have a 2.98% dividend yield, based on the latest intraday stock price of $72.23. The stock has technical support in the $68 price area. The stock is trading near the all-time high range of $74-$77 a share.
The Coca-Cola Company (KO) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars. PepsiCo, Inc. (PEP) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.