Susquehanna Sees Strength In PepsiCo

In a report published Tuesday, analysts at Susquehanna Financial Group initiated coverage of

with a Positive rating and a price target of $123. The company is currently at an attractive valuation as compared to its peer group, despite having mixed fundamentals. The company's beverage business has been reporting lackluster results for the past five years, while the performance of the company as a whole was mixed. The analysts believe that "there is little evidence that the current group structure has added value." On the other hand, Frito-Lay has been performing considerably better than the US FMCG industry on average. "With likely continued unexciting growth metrics (guidance for "comparable" EPS growth of 7% for 2015 should be deflated by emerging markets inflation), real upside for the stock will have to come from larger structural changes, in our view," the analysts added. Shares of PepsiCo traded recently at $96.62, up 1.1 percent.