Consumer Nation
- Predictions 2010: Consumers
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Cyber Monday: The Last Vestige of Dotcom Hype
- Diving Partridge Demand Can't Keep Lid on '12 Days' Cost
- Longer Lines, Fuller Carts This Black Friday
- EA Sports Hopes to Pump Up Sales Through Pop-Up Locations
- Consumers Catching the Holiday Spirit
- Blue Jeans Expected to See Another Green Christmas
- Holiday Tipping: Who And How Much
- Deep Discounts Should Make It a Very Tech-y Holiday
RSS FEED
MOST SHARED
- Keeping America Great
- Kohlberg Kravis Bidding for Morgan Stanley's CICC Stake
- Cisco Has 84% of Tandberg, Won't Extend Bid
- UK Economy Turned, Inflation to Spike: BoE Economist
- Australia Regulator Opposes Caltex-Exxon Deal
- Case Closed but Woods Scrutiny Continues
- Australia Parliament Rejects Carbon Trade Laws
- Hyundai's US Auto Sales Jump 46% in November
- Unemployment to Peak at 10.5%: Moody's Economist
- 8 Stocks to Gain on Obama's Afghan Plan: Analysts
- BofA On Proposed Changes In The Housing Bailout Program
- The Future of The Media Landscape
- November Auto Sales Muddle Along
- Busch: What Obama Won't Say Tonight
- Stick with Equities—Avoid Emerging Markets: Laszlo Birinyi
- Pfizer Chomps On A Carrot
- Predictions 2010: Technology
- 'Black Swan' Shuns Public Life Because of Bernanke
- Look Ahead: Markets Count Down to US Jobs Report
- FHA to Toughen Mortgage Rules in Lenders Crackdown
- Obama to Send More Troops; Seeks Afghanistan Exit
- GM Removes CEO Henderson; Whitacre Is Interim Chief
- UK Economy Turned, Inflation to Spike: BoE Economist
- Who Were the Biggest Winners And Losers This Year?
- GE, Comcast Complete Deal Over NBC Universal: Source
- Case Closed but Woods Scrutiny Continues
Text Size 
News Editor
PepsiCo shares rallied Friday as the beverage company inched closer to the dawn of a new Pepsi generation.
 |
Photo: Mashroms At least one analyst says the current Wall Street consensus estimate for PepsiCo is still too low. |
Pepsi [PEP
Loading...
()
] filed proxies connected with its planned acquisitions of its two largest bottlers, Pepsi Bottling Group [PBG
Loading...
()
] and PepsiAmericas [PAS
Loading...
()
].
The proxies, which did not include a provision for a "material adverse change," imply that Pepsi will likely go ahead with an acquisition even if regulators force Pepsi to terminate distribution relationships with Dr Pepper Snapple Group [DPS
Loading...
()
]. According to analysts, this was a concern that was weighing on Pepsi shares in recent weeks.
In addition, there were positive comments from analysts. Barclays' consumer staples team moved Pepsi to the No. 1 spot on its "Favorites" list, and Deutsche Bank increased its estimate for Pepsi's 2010 earnings, citing lower projections for the cost of interest and depreciation for the new forecast. Deutsche Bank analyst Marc Greenberg now expects earnings to be $4.20 a share, about 4 cents higher than his prior estimate for next year's earnings.
Analysts polled by Thomson Reuters had estimated earnings of $4.10 a share.
In a research note, Stifel Nicolaus analyst Mark Swartzberg said he suspects the Wall Street consensus for PepsiCo is still too low, and he expects projected earnings growth will accelerate materially before the year's end.
His estimate currently stands a penny below Greenberg's at $4.19 a share.
Pepsi is expected to close its acquisition of the bottlers in either late 2009 or early 2010.
Although the proxies seem to indicate a strong commitment to get the deal done regardless of the relationship with Dr Pepper, it is still a significant relationship for PepsiCo, Swartzberg said.
Swartzberg expects Dr Pepper to try to use the situation to negotiate a better deal with Pepsi, but not remove all of its volume from the Pepsi system.
This could improve the economics for Dr Pepper, and as a result, Swartzberg raised its price target for Dr Pepper to $32.
More from Consumer Nation:
- Toymakers Stress Value for the Holidays
- Stingy Santa Is Coming Back This Holiday Season
- Will a $10 Hamster Have Them Fighting in the Aisles?
Questions? Comments? Email us at
Data is a real-time snapshot *Data is delayed at least 15 minutes