Dr Pepper Receives a Hold from Susquehanna

By Jason Carr

In a report released today, Pablo Zuanic from Susquehanna reiterated a Hold rating on Dr Pepper (NYSE: DPS), with a price target of $92. The company’s shares opened today at $93.24.

Zuanic wrote:

“DPS has recovered almost half of the drop post 1Q17 (Bai related), which was released on 4/26. But we remain cautious, and think the 7% premium to F&B peers (on apples-to-apples valuation comps) may be unwarranted for a stock with a growth profile at best in line with peers, facing a challenged category (CSD are still over 80% of volumes), and paying steep multiples for non-CSDs (4x 2017 estimated Bai sales, or about 7.4x 2016 sales). We also think the company’s productivity program is par for the industry based on results so far. Net, we maintain the Neutral stance, but would expect to continue to underperform (DPS +3% YTD vs. +9% for S5CONS). See our updated estimates. Our Dec’17 price target of $92 assumes 0% peer premium on our 2018 estimates (we are 3% below consensus for 2018 EPS). Latestscanner data Performance: 1Q17 $ sales grew +1.3%, in line with the +1.4% Dec. qtr. pace.”

According to TipRanks.com, Zuanic is a 3-star analyst with an average return of 1.4% and a 46.8% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Constellation Brands Inc, Anheuser-Busch Inbev Sa, and Mondelez International.

Dr Pepper has an analyst consensus of Moderate Buy, with a price target consensus of $101.

The company has a one year high of $99.47 and a one year low of $81.05. Currently, Dr Pepper has an average volume of 1.22M.

Based on the recent corporate insider activity of 81 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of DPS in relation to earlier this year. Earlier this month, Joyce Roche, a Director at DPS bought 1,144 shares for a total of $74,962.

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Dr Pepper Snapple Group, Inc. engages in the manufacturing, marketing and distribution of non-alcoholic beverages with a portfolio of flavored carbonated soft drinks and non-carbonated beverages. It operates through the following segments: Beverage Concentrates, Packaged Beverages, and Latin America Beverages. The Beverage Concentrates segment involves in manufacturing and selling carbonated soft drinks and other branded concentrates and syrup. The Packaged Beverages segment offers manufacturing and distribution of packaged beverages and other products through both direct store delivery system and warehouse direct delivery system. The Latin America Beverages segment includes manufacturing and distribution of concentrates, syrup and finished beverages. The company was founded on May 7, 2008 and is headquartered in Plano, TX.