Wells Fargo Upgrades Dr Pepper Snapple to “Outperform”; Target, Estimates also Raised (DPS)

Comment

Shutterstock photo

Beverage maker Dr Pepper Snapple Group Inc ( DPS ) on Tuesday caught a huge upgrade from analysts at Wells Fargo.

The firm boosted its rating on DPS from "Market Perform" to "Outperform" and lifted its price target range from $36-38 to $45-47. That new range suggests up to an 11% upside to the stock's Monday closing price of $42.45.

A Wells Fargo analyst commented, "We now expect DPS will benefit from a material acceleration in EPS growth in 2013 (+11.7%) and multiple expansion over the next few months. If recent commodity price trends hold over the next quarter, DPS should demonstrate significant earnings leverage in 2013 - well in excess of current 'street' estimates. Furthermore, we think DPS valuation multiples should expand due to: (1) the company's improved performance optics, (2) ongoing rational industry pricing, (3) limited negative impact from increased PEP marketing spend, and (4) a 'flight to quality' in the consumer sector."

Wells Fargo also boosted its fiscal fourth quarter, full-year 2012, and full-year 2013 earnings estimates for the company.

Dr Pepper Snapple shares were mostly flat in premarket trading Tuesday.

The Bottom Line
Shares of Dr. Pepper Snapple Gropup ( DPS ) have a 3.20% dividend yield, based on last night's closing stock price of $42.45. The stock has technical support in the $39-$40 price area. The shares are trading at all-time highs.

Dr Pepper Snapple Group Inc ( DPS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Created by Dividend.com



This article appears in: Investing Stocks
Referenced Stocks: DPS


More from Dividend.com







Dividend.com
Contributor:

Dividend.com

Dividends
Follow on:


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com