PBG Retains Its Buy Rating

Tags: pbg
28 Sep 10:03pm
Posted by ZacksResearch
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Zacks senior consumer products analyst Steven Ralston, CFA is reiterating his Buy recommendation on shares of Pepsi Bottling Group (PBG).  Here's why:

'The Pepsi Bottling Group continues to execute well in a difficult soft drink environment. The company has reported solid net revenue per case in the U.S. and European volume growth has been strong. In addition, cost and productivity initiatives are more than offsetting cost pressures from higher raw material prices.

'The rating on Pepsi Bottling Group is a Buy. Management raised guidance for 2007 based on better-than-expected results in the first half of the year. Earnings are now expected to be in the range of $2.02 to $2.07 per diluted share, up from the earlier estimated range of $1.90 to $1.98 per diluted share.

'During times of low single-digit volume growth, the P/E range has been between 12 and 19. Given management's higher EPS expectations for 2007, the target price is based on a 20 P/E on trailing 12 month earnings; therefore, the target price is $39.25.'

Read the full analyst report on PBG


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