UPDATE: Goldman Sachs Downgrades Dr. Pepper Snapple Group on Multiple Risk Factors

In a report published Thursday, Goldman Sachs analyst Judy E. Hong downgraded the rating on Dr. Pepper Snapple Group (NYSE: DPS) from Neutral to Sell, and lowered the price target from $48.00 to $45.00.

In the report, Goldman Sachs noted, “We downgrade shares of DPS to Sell from Neutral and see 2% downside to our new 12-month price target of $45 versus 10% upside for rest of coverage. There are three tenets to our thesis: (1) we see potential for top-line disappointment based on broad-based weakness in US non-alcoholic ready to drink (NARTD) beverages; (2) higher spending behind the TEN platform is eating into cost savings while providing minimal sales lift; and (3) valuation is likely to further compress given weakening fundamentals. We prefer CCE (CL-Buy) and TAP (Buy) within the beverage sector, both of which trade at a similar valuation to DPS but with a better growth outlook.”

Dr. Pepper Snapple Group closed on Wednesday at $46.09.