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PEP

PepsiCo

$110.31

-1.1175 (-1.00%)

, BUD

AB InBev

$118.62

-0.68 (-0.57%)

10:30
10/02/17
10/02
10:30
10/02/17
10:30

Jefferies cuts PepsiCo while peer calls out takeover potential

This morning, Jefferies analyst Kevin Grundy downgraded PepsiCo (PEP) to Hold given a myriad of headwinds facing the snack and soda giant. Meanwhile, his peer at Susquehanna argued in a note of his own that he continues to see the company as "the next logical target" for AB InBev (BUD) in a joint bid with Kraft Heinz (KHC). MOVING TO THE SIDELINES: In a research note to investors this morning, Jefferies' Grundy downgraded PepsiCo to Hold from Buy, given slowing North America beverage trends, contracting food multiples, high exposure to the difficult U.S. environment, and a likely need for reinvestment that should cap the stock over the next 12 months. The analyst pointed out that the food and beverage company is losing market share in some 85% of its beverage portfolio over the long-term in tracked channels. Further, Grundy believes that the upside from productivity savings now has "less merit." The analyst also lowered his price target on the shares to $108 from $133. 'LOGICAL TARGET': In a research note of his own, Susquehanna analyst Pablo Zuanic told investors he projects year-to-date and third quarter earnings below consensus when PepsiCo reports on Wednesday, given weaker than expected trends for Quaker and its beverages segment. However, the analyst noted that he stays Positive on the stock as he continues to see PepsiCo as the "next logical target" for AB InBev, possibly in a joint bid with Kraft Heinz. Further, Zuanic argued that this could happen earlier than expected if Kraft Heinz gives up on Unilever (UN; UL) or a pure food play. The analyst reiterated a Neutral rating and $135 price target on PepsiCo's shares on valuation and fundamentals. PRICE TARGET: In morning trading, shares of PepsiCo have dropped about 1% to $110.20.

PEP

PepsiCo

$110.31

-1.1175 (-1.00%)

BUD

AB InBev

$118.62

-0.68 (-0.57%)

KHC

Kraft Heinz

$77.55

-0.42 (-0.54%)

UN

Unilever; also tag UL

$59.47

0.43 (0.73%)

UL

Unilever; also tag UN

$58.15

0.19 (0.33%)

  • 04

    Oct

PEP PepsiCo
$110.31

-1.1175 (-1.00%)

10/02/17
10/02/17
DOWNGRADE

On The Fly: Top five analyst downgrades
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. PepsiCo (PEP) downgraded to Hold from Buy at Jefferies with analyst Kevin Grundy saying North American beverage trends continue to deteriorate and Pepsi's likely need for reinvestment should "cap the stock" over the next 12 months. 2. Western Digital (WDC) downgraded to Neutral from Outperform at Baird with analyst Tristan Gerra saying he believes the potential outcomes from the company's ongoing litigation with Toshiba (TOSYY) "range from neutral to significantly negative" and the ongoing fight will cap the stock's valuation in the near-term. 3. Uniti Group (UNIT) downgraded to Neutral from Overweight at JPMorgan with analyst Philip Cusick saying the "theme of Windstream's (WIN) distress continues to increase in volume." 4. Parker-Hannifin (PH) downgraded to Equal Weight from Overweight at Morgan Stanley with analyst Nigel Coe saying he sees a more balanced risk-reward following the stock's strong outperformance since the election. 5. bluebird bio (BLUE) downgraded to Underweight from Equal Weight at Morgan Stanley with analyst Matthew Harrison saying he believes the risks ahead of the company's presentation of LentiGlobin sickle cell data at December's American Society of Hematology meeting remains underappreciated. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
10/02/17
SUSQ
10/02/17
NO CHANGE
Target $135
SUSQ
Positive
PepsiCo could be next takeout for AB In Bev, says Susquehanna
Susquehanna analyst Pablo Zuanic noted Pepsico (PEP) reports Q3 on October 3rd and he projects year-to-date metrics and earnings are below consensus. He trimmed his North American sales growth on weaker trends than expected, but he believes the potential miss could already be reflected in the shares. The analyst said based on valuation and fundamentals the stock deserves a Neutral rating but he continues to see it as the next logical target for AB InBev (BUD) in a joint bid with Kraft Heinz (KHC). Zuanic keeps a $135 price target on PepsiCo shares.
10/02/17
JEFF
10/02/17
DOWNGRADE
Target $108
JEFF
Hold
PepsiCo downgraded to Hold from Buy at Jefferies
Jefferies analyst Kevin Grundy downgraded PepsiCo to Hold and cut his price target for the shares to $108 from $133. The food and beverage company closed Friday down 21c to $111.43. North American beverage trends continue to deteriorate and Pepsi's likely need for reinvestment should "cap the stock" over the next 12 months, Grundy tells investors in a research note. The analyst adds that food valuation multiples are contracting and that Pepsi has high exposure to a difficult U.S. environment.
09/14/17
MACQ
09/14/17
INITIATION
Target $125
MACQ
Outperform
PepsiCo initiated with an Outperform at Macquarie
Macquarie analyst Caroline Levy initiated PepsiCo with an Outperform and a $125 price target saying management has continued to evolve the company to win as consumer changes accelerate. Levy said Pepsi has leading brands in big markets, a best in class snack business, and financial discipline.
BUD AB InBev
$118.62

-0.68 (-0.57%)

09/08/17
ARGS
09/08/17
INITIATION
ARGS
Buy
AB InBev initiated with a Buy at Argus
Argus analyst Stephen Biggar started coverage of AB InBev with a $136 price target and a Buy rating. The analyst noted that the company's organic growth accelerated year-over-year in 1H17. He thinks that the company's growth can accelerate modestly going forward, while its margins can rise. The analyst says that the company can benefit from increased penetration in emerging markets, higher demand for premium beers and increased sales of nonalcoholic drinks.
09/08/17
09/08/17
INITIATION

On The Fly: Top five analyst initiations
Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. DowDuPont (DWDP) initiated with a Top Pick at RBC Capital. 2. Electronic Arts (EA) was initiated with a Conviction Buy while Activision Blizzard (ATVI) was initiated with a Neutral at Goldman Sachs. 3. AB InBev (BUD) initiated with a Buy at Argus. 4. LivaNova (LIVN) initiated with a Buy at Jefferies. 5. Fate Therapeutics (FATE) resumed with an Outperform at Leerink. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.
05/05/17
STFL
05/05/17
NO CHANGE
STFL
AB InBev price target raised to $134 from $116 at Stifel
Stifel analyst Mark Swartzberg increased his price target on AB InBev, citing the company's improved organic growth and its recent trend of ramping up the distribution of beverages it acquired in multiple markets. He expects the company's accelerated growth rate to continue and keeps a Buy rating on the shares.
KHC Kraft Heinz
$77.55

-0.42 (-0.54%)

08/21/17
ARGS
08/21/17
NO CHANGE
ARGS
Kraft Heinz weakness creates buying opportunity, says Argus
Argus analyst John Eade says that Kraft Heinz's weakness over the past three months has created a buying opportunity. The analyst says that the company can benefit from "strong cost synergies and continued earnings growth."
08/16/17
PIPR
08/16/17
NO CHANGE
Target $92
PIPR
Neutral
Kraft Heinz could have interest in Nestle divestitures, says Piper Jaffray
Piper Jaffray analyst Michael Lavery expects Kraft Heinz (KHC) to pursue further consolidation, likely in packaged food, and believes potential divestitures from Nestle (NSRGY) could fit the company's criteria well. Such a deal could boost Kraft's international scale and provide synergy savings in its U.S. frozen supply chain, the analyst tells investors in a research note. He maintains a Neutral rating on Kraft Heinz shares with a $92 price target.
08/04/17
FBCO
08/04/17
NO CHANGE
Target $100
FBCO
Outperform
Kraft Heinz organic sales declined less than feared, says Credit Suisse
Credit Suisse analyst Robert Moskow noted that Kraft Heinz's organic sales decline of 0.9% was better than feared and better than average in the context of the current packaged foods environment. The analyst, who thinks the company's net savings will "probably" go "well beyond" its $500M stated target and credits management for making a good case for why sales growth will re-accelerate in the second half of the year, keeps an Outperform rating and $100 price target on Kraft Heinz shares.
UN Unilever; also tag UL
$59.47

0.43 (0.73%)

05/17/17
JEFF
05/17/17
NO CHANGE
JEFF
Jefferies sees Unilever as interested if Colgate is for sale
After the New York Post reported that Colgate (CL) may be willing to sell for $100 per share, Jefferies analyst Martin Deboo says he'd expect Unilever (UN, UL) to be an interested party. The analyst notes he's argued for some time that Unilever should create a "New World Order" in Household & Personal Care by acquiring Colgate. Such a deal would support his bullish thesis on Unilever shares.
07/10/17
SUSQ
07/10/17
NO CHANGE
Target $91
SUSQ
Kraft Heinz likely to go hostile in pursuit of Unilever, says Susquehanna
Susquehanna analyst Pablo Zuanic noted that a six-month hiatus required by British takeover law will have passed in the middle of August and he sees the possibility of Kraft Heinz (KHC) coming back with a hostile bid for Unilever (UN) as "more than 75% likely" to happen. A $200B deal could be accretive in the mid-20% range for Kraft shareholders, estimates Zuanic, who cut his price target on Kraft Heinz shares to $91 from $99 to reflect a smaller premium to its peers. He keeps a Neutral rating on the Kraft shares.
08/10/17
RBCM
08/10/17
DOWNGRADE
RBCM
Underperform
Unilever downgraded to Underperform from Sector Perform at RBC Capital
RBC Capital analyst James Edwardes Jones downgraded Unilever based on valuation and his belief that the company may not meet its 2020 targets. Price target to $42 from $45.
08/10/17
08/10/17
DOWNGRADE

On The Fly: Top five analyst downgrades
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Unilever (UN, UL) downgraded to Underperform from Sector Perform at RBC Capital with analyst James Edwardes Jones citing valuation and his belief that the company may not meet its 2020 targets. 2. Masonite (DOOR) downgraded to Equal Weight from Overweight at Stephens. 3. Synacor (SYNC) downgraded to Hold from Buy at Craig-Hallum with analyst Jason Kreyer saying he is "unequivocally" disappointed that the AT&T (T)portal launch has not yet monetized at a rate anticipated. 4. NetEase (NTES) downgraded to Underperform from Outperform at CLSA. 5. Achillion (ACHN) downgraded to Neutral from Outperform at Baird with analyst Brian Skorney saying the PNH data reported earlier this week was better than expected but he is not convinced that given the drug's therapeutic window, dosing, and impact on LDH that it can be competitive with Soliris. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
UL Unilever; also tag UN
$58.15

0.19 (0.33%)

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