Morgan Stanley Believes Margin Forecasts are Too Low for Dr. Pepper Snapple Group

In a report published Wednesday, Morgan Stanley analyst Dara Mohsenian reiterated an Equal-Weight rating on

. In the report, Morgan Stanley noted, “DPS reports Q3 EPS on 10/23, and our $0.91 Q3 estimate is 3c above consensus. We believe that consensus margin forecasts are too low given benign commodities, RCI savings, and lower marketing spend. We do expect DPS to raise FY EPS guidance given these dynamics, which is expected by the market given a high bar after favorable YTD stock performance (+30% vs +4% XLP).” Dr. Pepper Snapple Group closed on Tuesday at $65.36.