Posted on 07/01/2005 11:51:44 AM PDT by Zuben Elgenubi
[No Indra?]
Friday July 1, 1:04 pm ET
PepsiCo, Pepsi Bottling Shares Dip on UBS Downgrade to 'Neutral' From 'Buy'
NEW YORK -- PepsiCo Inc. and Pepsi Bottling Group Inc. shares dipped on Friday, after investment bank UBS cut its opinion on the snacks and soft drink maker, citing concerns about rising energy costs and signs of revival at its chief rival, Coca Cola Co.
Shares of PepsiCo, the world's second biggest soft drink maker after Coke, shed 45 cents, or nearly 1 percent, to $53.48 on the New York Stock Exchange, where it was among the most active issues in afternoon trading. Those of manufacturer and distributor Pepsi Bottling, of which PepsiCo owns a 43 percent stake, slipped 24 cents to $28.37.
In a note to clients, UBS said it believes PepsiCo's costs of doing business could rise, driven by stubbornly high oil prices and possibly more marketing costs, as it combats an increase in discounting at Coke.
"We believe (Coke) is becoming increasingly aggressive and beginning to show signs of improvement, and that (PepsiCo) may need to increase marketing spend and bottler funding in response," UBS said. An increase in advertising from Coke means "Pepsi will like to increase promotional activity in response," UBS added.
UBS also forecast slower volume growth at PepsiCo's Frito-Lay business, hampered by high oil prices. PepsiCo owns Frito-Lay, the world's biggest snack maker, along with its beverage business.
The investment bank cut its recommendation to "Neutral" from "Buy" and trimmed its full-year earnings estimates for both companies, but maintained its stock price targets of $61 for PepsiCo and $33 for Pepsi Bottling.
UBS lowered its 2005 earnings guidance on PepsiCo by 3 cents to $2.58 per share, and trimmed its 2006 view by 5 cents to $2.87 per share. The investment bank reduced its 2005 forecast for Pepsi Bottling by a penny to $1.83 per share, and shaved its 2006 projection by 5 cents to $1.99.
Coca-Cola shares rose 54 cents, or 1.3 percent, to $42.29 on the NYSE, where it was also among the most active issues.
Shares of PepsiCo, the world's second biggest soft drink maker after Coke, shed 45 cents, or nearly 1 percent, to $53.48 on the New York Stock Exchange, where it was among the most active issues in afternoon trading. Those of manufacturer and distributor Pepsi Bottling, of which PepsiCo owns a 43 percent stake, slipped 24 cents to $28.37.
In a note to clients, UBS said it believes PepsiCo's costs of doing business could rise, driven by stubbornly high oil prices and possibly more marketing costs, as it combats an increase in discounting at Coke.
"We believe (Coke) is becoming increasingly aggressive and beginning to show signs of improvement, and that (PepsiCo) may need to increase marketing spend and bottler funding in response," UBS said. An increase in advertising from Coke means "Pepsi will like to increase promotional activity in response," UBS added.
UBS also forecast slower volume growth at PepsiCo's Frito-Lay business, hampered by high oil prices. PepsiCo owns Frito-Lay, the world's biggest snack maker, along with its beverage business.
The investment bank cut its recommendation to "Neutral" from "Buy" and trimmed its full-year earnings estimates for both companies, but maintained its stock price targets of $61 for PepsiCo and $33 for Pepsi Bottling.
UBS lowered its 2005 earnings guidance on PepsiCo by 3 cents to $2.58 per share, and trimmed its 2006 view by 5 cents to $2.87 per share. The investment bank reduced its 2005 forecast for Pepsi Bottling by a penny to $1.83 per share, and shaved its 2006 projection by 5 cents to $1.99.
Coca-Cola shares rose 54 cents, or 1.3 percent, to $42.29 on the NYSE, where it was also among the most active issues.
If Pepsi goes out of it's way to insult me, I'm not going to go out of my way to purchase their product.
I have to admit I studiously avoid purchasing Pepsi products as a result of her little parable to the graduates...
The only items I have purchased from Pepsi in the past five years have been Tropicana and Aquafina water. I can't eat the processed foods like Lay's and the others because of my cardiovascular disease. Since Indra's speach, no Tropicana nor Aquafina
I want to see PEP go down too, but I thought dead cat bounce referred to a stock bouncing off of it's lows, but destined to make new lows.
I rarely drink bellywash but try Pepsi's Sierra Mist. I drink that sometimes.
+++++++++++++++++++++++
Used the wrong term as you point out. Should wait until it rebounds after 51.50 or so. I assure you I know what the middle finger analogy is, tho.
I'm in the dark about her speech. But, being a Coke person since about the age of 13, it's very easy to live without Pepsi products.
Isnt Pepsi the same as Uni-Lever? I have been boycotting them since the whole dixie chicks thing (lipton tea) and then again during the Whoopie Goldberg (slim fast) thing! They just cant seem to get back in my good graces...besides Coke tastes much much better!
FR LINK.
A simple letter to PepsiCo is far more effective than any boycott, especially if you are a stockholder like me.
I also got about $25 bucks in coupons out of it.
I agree completely, but after a day or so the withdrawal of my mountain dew habit it causes me to shake my way to the store and buy a bottle.
Your letter to Pepsi is a better idea, esp since you got renumeration.
RE your tag - do you have a link?
BTW, thanks, I think I will buy more PepsiCo stock. It has done VERY well by me since I was a teen racing BMX for them and got the stock cheap.
I don't know if we will see anything from Tempel it's so far from earth, but there will be a live thread starting sometime Sunday. The impact is scheduled Sunday night/Monday morning depending where you are. There will be some ping lists, but the thread should be active Sunday evening in case somebody doesn't get pinged.
Boycott Pepsi! :-)
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