Fri, Sep. 16, 10:21 AM
- Credit Suisse names its favorite stocks in the beverage sector and cautions on others with a wave of initiations.
- The investment firm starts off coverage on Monster Beverage (MNST -0.4%), Dr. Pepper Snapple (DPS), and PepsiCo (PEP -0.4%) with Outperform ratings.
- Neutral ratings filter down on Coca-Cola (KO -0.6%) and Constellation Brands (STZ -1.4%).
- CS hangs an Underperform rating on Boston Beer (SAM -1.2%).
- Forward PE ratios on the group: Monster 30.8, Dr. Pepper 20.6, PepsiCo 20.5, Coca-Cola 21.1, Constellations Brands 23.4, Boston Beer 23.2.
Thu, Sep. 15, 5:01 AM
- The American Beverage Association is suing to block Philadelphia's soft drinks tax, marking the latest clash between the soda industry and public officials seeking to boost revenue and combat health risks.
- In June, Philly became the largest U.S. city to approve a volume-based tax of 1.5%-per-ounce on sugar sweetened beverages.
- Voters in San Francisco and at least three other places will vote in November on whether to impose similar levies.
- Related stocks: KO, PEP, DPS, MNST, FIZZ, SBUX, UL, PG
Wed, Sep. 14, 9:39 AM
- In a fresh note to investors, Susquehanna analyst Pablo Zunaic tackles the huge question of if PepsiCo (NYSE:PEP) or Coca-Cola (NYSE:KO) will be the next major target for Anheuser-Busch InBev (NYSE:BUD) down the road.
- Though it's highly speculative at this point, PepsiCo appears as the more logical choice if the pros and cons are lined up. Snippets from Zuanic's note are posted below.
- On accretion value: "An acquisition of PEP drinks would be over 20% EPS accretive (one quarter stock funded), while a bid for KO would not (all cash a KO bid would push gearing to 8x)."
- On global markets: "True, overseas KO is much larger than PEP, but that may be a moot point as the KO overseas business is mainly in the hands of independent bottlers (so is PEP’s except for Russia). But we think PEP bottlers in markets like Mexico, China, India, and Canada, could be more reasonable acquisition targets for BUD down the road (than KO bottlers) and would actually provide relevant scale up benefits."
- On distribution: "In terms of bringing scale to its beer distributors we note KO and PEP are similar in size in the US (in terms of end unit cases of NARTDs), but more importantly the PEP drinks business is 75% PEP owned while by end of 2017 KO’s US operating business (bottling and distribution) will all be in the hands of independent bottlers."
- On the Buffett factor: "Those expecting a bid for KO say so in part because of the Warren Buffet presence (holder of a 9.3% stake in KO), but would he really want that to be his legacy (i.e., the man that sold the Coke?)."
- Current market caps: BUD $194B, KO $178B, PEP $149B.
- Name check: Financing the deal is one matter, but negotiating a new corporate name for the mega-beverage entity could be just as engaging.
Thu, Sep. 8, 9:31 AM
- Mary Barra and Indra Nooyi were named the two most powerful women in business by Fortune in a repeat of last year's ranking.
- Nooyi has held the top spot at PepsiCo (NYSE:PEP) for ten years, while Barra took over the CEO position at GM in 2013.
- Both execs have received high marks from Wall Street, although GM's stock price has been a disappointment.
- "We do believe that General Motors stock is undervalued. We think the most important thing we can do is just keep putting results on the board, quarter after quarter, year after year, while demonstrating that we have a strong future with the technologies that everyone understands are transforming this industry," says Barra.
- Though PepsiCo has outperformed Coca-Cola on a YTD, one-year, and five-year basis - some investors continue to clamor for a separation of the food and beverage businesses.
Wed, Sep. 7, 2:12 PM
- PepsiCo (PEP -0.8%) reaffirmed FY16 guidance ahead of a presentation at the Back to School conference.
- The company expects organic revenue growth of 4% and sets FY16 EPS guidance at $4.71 vs. $4.76 consensus.
- Susquehanna analyst Pablo Zuanic lowered his price target on PepsiCo to $108 from $114 in part as an adjustment to the thinner food and beverage sector multiple.
- "Downside risks would come from deterioration in revenue growth in a challenging macroeconomic environment, as well as if the company failed to deliver on 2016 guidance and long-term profit margin targets," writes Zuanic in a fresh note to investors.
- "Upside risks would come from any outside actions such as the role of activists and private equity as the FMCG industry further consolidates," he adds.
Tue, Aug. 30, 3:26 PM
- PepsiCo (PEP -0.8%) introduces a new organic version of Gatorade without any artificial ingredients.
- G Organic is already being sold in a few Kroger stores, with a broader roll-out across more retail chains planned for the next few weeks.
- The suggested retail price for the 16.9-ounce drink is $1.60 per bottle, compared to $1.19 for regular gatorade.
- Gatorade already claims about 70% of the sports drink market to easily outdistance Coca-Cola's Powerade line.
Tue, Aug. 30, 8:01 AM
- Mondelez International (NASDAQ:MDLZ) is higher after the company announced it pulled out of discussions with Hershey.
- Susquehanna analyst Pablo Zuanic thinks if the company wants to expand its confectionary and snacks footprint a merger with a European name (Lotte, Ferrero, or Perfetti Van Melle) or a smaller natural/organic player might make senses.
- Zuanic calls a merger with PepsiCo (NYSE:PEP) more of a long shot and in the end thinks a takeover by Kraft Heinz (NASDAQ:KHC) might be the end result.
- MDLZ +3.21% premarket to $44.42.
Mon, Aug. 29, 7:59 AM
- Soda tax proposals will be on the ballot in three cities in the San Francisco Bay area this November and likely in Boulder, Colorado as well.
- The soda manufacturing industry is spending heavily in San Francisco, Oakland, Albany, and Boulder in an effort to defeat the measures. Unlike some votes in the past in the U.S. that weren't approved, only a simple majority is needed at the November election.
- Related stocks: KO, PEP, DPS, MNST, FIZZ.
Thu, Jul. 28, 4:06 AM
- U.S. firms operating in Venezuela have escalated the use of an accounting maneuver to insulate themselves from the plunging bolivar and worsening economic crisis in the country that has erased more than $10B in profits over the past 18 months.
- Colgate-Palmolive (NYSE:CL), Procter & Gamble (NYSE:PG) and PepsiCo (NYSE:PEP) have all begun deconsolidating the financial results of their Venezuelan operations, meaning they can essentially no longer hurt or benefit a U.S. parent company.
Thu, Jul. 14, 4:33 PM
Wed, Jul. 13, 12:30 PM
Wed, Jul. 13, 11:35 AM
- It's steady as she goes again for the group of well-known consumer staples stocks that investors continue to find appealing amid global volatility and low interest rates.
- Procter & Gamble (PG +0.2%), Colgate-Palmolive (CL +0.4%), Clorox (CLX +0.6%), Kimbery-Clark (KMB +0.3%), Coca-Cola (KO +0.2%), PepsiCo (PEP +0.7%), Altria Group (MO +0.5%), Philip Morris International (PM +0.1%), Church & Dwight (CHD +0.3%), and Unilever (UN, UL) have all outperformed the S&P 500 Index this year with returns ranging from 7% to 18%. Kraft Heinz (KHC +1%), Energizer (ENR -0.6%), Hershey (HSY +0.4%), Campbell Soup (CPB +0.3%), and J.M. Smucker (SJM +0.4%) are all up at least 20% YTD.
- Goldman Sachs has an explanation on why a generous valuation is warranted for the staples favorites.
- "We raise our average Staples target multiples to 20-22X P/E, up from the 19-20X range prior, to reflect the recent decline in 10-year yield as well as some likelihood of a slower rise in yield over the next 12 months and broader market volatility," wrote the MNST)+(NYSE:STZ)+(NYSE:PF)/11822884.html" target="_blank">analyst team covering the sector in a note to investors.
- Top consumer staples picks from GS include Monster Beverage (MNST +0.4%), Constellation Brands (STZ +0.2%), Pinnacle Foods (PF +1.2%), and Post Holdings (POST +0.5%).
- Consumer staples ETFs: XLP, VDC, FXG, RHS, FSTA, PSL, PSCC.
Tue, Jul. 12, 1:41 PM
- Frito-Lay is "just getting started" in the premium snacks business, according to PepsiCo (PEP +0.1%) CEO Indra Nooyi.
- "Frito-Lay US premium portfolio growth is outpacing the growth in the balance of the portfolio by a factor of more than four times. And we’re extending our value share leadership position in premium salty snacks," Nooyi said.
- PepsiCo reported a 4% gain in organic sales for Frito Lay North America in Q2.
- Earnings call transcript
Mon, Jul. 11, 2:12 PM
- A bill requiring food companies to label GMO ingredients was approved by the U.S. Senate by a 63 to 30 vote and now heads to the House of Representatives.
- The negotiated bill requires food companies to label genetically modified food by a phrase, symbol on the package, or a bar code that can be scanned by smartphones.
- The Department of agriculture still has two years to write the precise labeling rules if the House approves the bill.
- The passage of the bill is seen as a positive for the food sector as the alternative of having to adhere to state-by-state rules could create operational chaos for national sellers.
- Food stocks: SENEA, SENEB, THS, OTCPK:NCRA, CPB, MDLZ, GIS, OTCPK:NSRGY, FLO, CAG, DF, SJM,DF, ANFI, JJSF, WWAV, UL, OTCQX:DANOY, OTCPK:PLATF, POST, K, PEP, DMND, PF, HAIN, KO, BETR, KHC, WILC, PPC, PF, LWAY, HRL, TSN, DTEA, SAFM, BRID.
Thu, Jul. 7, 1:16 PM
- M&A intrigue has been ratcheted up in the food sector after Danone ponied up $10B for WhiteWave Foods.
- Stocks trading well-above broad market averages today include Lifeway Foods (LWAY +6.4%), G. Willi Food-International (WILC +5.9%), DAVIDsTEA (DTEA +4.7%), Golden Enterprises (GLDC +2.6%), and Snyder's-Lance (LNCE +3%).
- Just don't expect PepsiCo (PEP +1.8%) to rush into an acquisition half-fast after CFO Hugh Johnston told TheStreet.com that investors can assume the company hasn't found an advantageous large-cap target. "We expect to do small tuck-in acquisitions," said Johnston.
- Previously: Danone agrees to $12.5B deal for WhiteWave Foods (July 7)
- Previously: WhiteWave trades above buyout price, Hain Celestial on the move (July 7)
Thu, Jul. 7, 7:16 AM
- PepsiCo (NYSE:PEP) reports organic revenue increased 3.3% in Q2. All segments were in positive organic growth territory, led by a 9% gain for the Latin America business and a 4% rise for Frito Lay North America.
- Core gross margin improved 75 basis points during the quarter and operating margin was 80 bps higher than last year.
- The solid quarter for PepsiCo led it to raise full-year guidance. The company now sees EPS of $4.71 vs. $4.66 prior and $4.57 consensus. It's one of the first full-year looks from an U.S.-based multinational after the Brexit vote.
- Previously: PepsiCo beats by $0.05, beats on revenue (July 7)
- PEP +1.50% premarket to $107.51.