Beverage maker Dr Pepper Snapple Group Inc. (
) on Friday caught a big downgrade from analysts at Wells
The firm said it cut its rating on DPS from "Outperform" to
"Market Perform," also lowering its valuation range from $43-45
down to $36-$38. That new range suggests zero upside to the stock's
Thursday closing price of $37.96.
A Wells analyst said the firm has "Expectations Of Challenging
2012. Our downgrade is based on the following four reasons: 1) 2012
volumes are likely to be softer than we had anticipated, 2)
Commodity costs continue to challenge fundamental improvement, 3)
RCI visibility has not improved, and 4) a Higher tax rate. Bottom
line - we think fundamentals imply 2012 EPS estimates are too high
and we recommend investors stay on the sidelines until DPS issues
its 2012 outlook in mid-February. We reduce our valuation range to
$36-38 from $43-45, and lower Q4, 2011, and 2012 EPS estimates to
$0.76, $2.73, and $2.85, from $0.77, $2.74, and $3.00."
Dr Pepper Snapple shares were unchanged in premarket trading
The Bottom Line
Shares of Dr. Pepper Snapple Group (
) have a 3.37% dividend yield, based on last night's closing stock
price of $37.96. The stock has technical support in the $35 price
area. If the shares can firm up, we see overhead resistance around
the $40 price level.
Dr Pepper Snapple Group Inc. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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, as well as a detailed explanation of
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