Investing.com – Piper Sandler led coverage of soft drink stocks by rating PepsiCo (NASDAQ:), Coca-Cola (NYSE:) Overweight and Keurig Dr Pepper (NASDAQ:) Neutral.
Keurig Dr Pepper received a $35 price target as the analyst cited headwinds from rising coffee bean costs and weak sales momentum. While Piper is optimistic about the Ghost brand’s growth potential, he remains cautious about pricing power amid record-high coffee costs.
PepsiCo reached its target of $171. Piper noted challenges related to consumer dissatisfaction with high prices and an uncertain outlook for 2025, but highlighted Frito-Lay’s potential recovery and productivity savings as key positives.
“It appears that a lot of uncertainty has already been factored in, and we believe that Frito-Lay, arguably the world’s best-performing food business, could eventually return to its previous form,” the Piper analyst wrote.
The target price for Coca-Cola was set at $74. The analyst noted its strong brands, execution and growth opportunities in emerging markets, noting significant potential gaps and high advertising costs compared to peers.
“KO’s portfolio benefits from attractive global beverage category growth rates and sustained share growth. It has open opportunities in emerging markets, where it has significant exposure. KO has impressive brand spend, with the highest advertising spend as a percentage of sales,” the analyst added.