UBS Reiterates Buy Rating on Pepsico (PEP)

UBS analyst Peter Grom reiterated a Buy rating and $175.00 price target on Pepsico (NASDAQ: PEP).

The analyst commented, "Pepsi announced that it will acquire Poppi, a pre-biotic soda brand, in an effort to augment its existing CSD portfolio with a high-growth, better-for-you brand. This acquisition represents Pepsi's latest push into more health-and-wellness oriented categories, and comes only 2 months after the company completed its acquisition of Siete Foods for $1.2Bn, a healthier brand within salty snacks. At the time of writing, shares are up +1.6% (outperforming the broader beverage set) - which could be a function of investors taking a constructive view around the company's decision to add a well-positioned brand in the eyes of the modern consumer to what has been a challenged PBNA portfolio. With shares trading at a ~20% discount to LC MNC peers, vs. a +LSD premium historically, we believe current levels continue to represent an attractive entry point. However, we still expect the catalyst path will be heavily tied to trends in North America (specifically salty snacks) and while our discussions with investors would suggest investors agree the current entry point feels attractive, many also seem willing to take a wait-and-see approach until there are signs that the business is on firmer footing."

For an analyst ratings summary and ratings history on Pepsico click here. For more ratings news on Pepsico click here.

Shares of Pepsico closed at $151.34 yesterday.

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