- Coca-Cola (NYSE:KO) was upgraded today to Neutral from Negative with a $40 price target, raised from $33, at Susquehanna, which speculates that KO could become a potential target for Anheuser-Busch InBev (NYSE:BUD) - following the merger deal with SABMiller - in the future if BUD decides it wants to enter the soft drink market.
- The firm also feels KO's North American profitability could be improved by better pricing in the U.S. and refranchising efforts; it also thinks KO could help its global growth platform with further M&A of its own, suggesting WhiteWave Foods (NYSE:WWAV) as a possibility.
- KO's fundamentals remain challenging, Susquehanna says, as 75% of earnings come from outside North America; dietary concerns remain an issue, especially around diet drinks; and the company’s ability to build a larger presence outside carbonated soft drinks remains questionable.