In a report released today, Kevin Grundy from Jefferies assigned a Hold rating to PepsiCo (NYSE: PEP), with a price target of $107. The company’s shares closed on Friday at $116.01.
Grundy noted:
“We see potential trading downside at PEP as its relative multiple remains elevated, despite fundamental challenges/weak EPS quality. W/ PEP ~1,300 bp vs and its NTM P/E multiple of ~20x now < 4 std. dev. above hist. avg. vs a 60/40 wtd. food/KO avg., we see scope for shares to retrace and fall closer to ~$105. We are negatively biased toward PEP and see better opps in HPC/bevs (Buy-rated ENR, MNST, CHD, COT). Reiterate Hold, $107 PT. PEP's shares have outperformed by ~1,300 bp vs. , now nearly four std. dev. above hist. avg.: PEP's shares have risen 21% since 5/9 vs. 8%/7% for KO / XLP. PEP is now trading nearly four std. dev. above its hist. avg. relative NTM P/E vs. a 60/40 wtd. basket of food stocks/KO (PEP's snacks/bevs profit mix)."
According to TipRanks.com, Grundy is a 4-star analyst with an average return of 6.5% and a 68.3% success rate. Grundy covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners, Edgewell Personal Care, and Monster Beverage Corp.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for PepsiCo with a $118.08 average price target, implying a 1.8% upside from current levels. In a report issued on July 9, RBC Capital also maintained a Hold rating on the stock with a $111 price target.
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PepsiCo’s market cap is currently $164.2B and has a P/E ratio of 36.14. The company has a Price to Book ratio of 16.24.
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