Piper initiates on soda stocks; Pepsi, Coca-Cola ‘overweight,’ Dr Pepper ‘neutral'

Investing.com -- Piper Sandler initiated coverage on soda stocks, rating PepsiCo (NASDAQ:PEP ), Coca-Cola (NYSE:KO ) “overweight,” and Neutral on Keurig Dr Pepper (NASDAQ:KDP ).    

Keurig Dr Pepper received a $35 price target, as analyst cited headwinds from rising coffee bean costs and weak sales momentum. While bullish on the Ghost brand’s growth potential, Piper remains cautious about pricing opportunities amid record-high coffee input costs.

PepsiCo got $171 target. Piper noted challenges from consumer pushback on high prices and uncertain 2025 guidance but highlighted Frito-Lay’s potential rebound and productivity savings as key positives.

“Much uncertainty looks priced in already, and we believe that Frito-Lay, arguably the best global food business, can return to form over time,” Piper analyst wrote.

Price target on Coca-Cola was set at $74. Analyst noted its strong brands, execution, and emerging market growth opportunities, noting significant whitespace potential and top-tier advertising spending relative to peers.

“KO's portfolio benefits from attractive global beverage category growth rates and sustainable share gains. It has whitespace opportunity in emerging markets where it has significant exposure. KO has impressive brand spending with the highest advertising expense as a percent of sales,” analyst added.

Source: Investing.com