Pepsi Bottling Group Inc. (PBG) continues to execute well in a difficult soft drink environment. The lackluster CSD [carbonated soft drink] environment in North America is being addressed with a robust pipeline of new products and new initiatives in the refreshment and hydration categories. Management's execution of business strategies has been superior to that of other major bottlers.
Nevertheless, net revenue per case in the U.S. has been strong, growing in the mid single-digit range due to a positive pricing environment. Significant upside potential in Pepsi Bottling Group's stock is expected when CSD volumes strengthen.
With the stock trading in the low-end of the historical valuation range, the Buy rating is maintained. The target price is based on a 12 P/E on trailing 12 month earnings; therefore, the target price is $27.75.
Read the full analyst report on PBG
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