UPDATE: UBS Initiates Coverage on Pepsico, Inc. at Neutral, Sets $85 Target

UBS initiated coverage on PepsiCo PEP with a Neutral rating and an $85 price target on Tuesday. Analyst Stephen Powers thinks a turnaround of the U.S. beverage business will “likely take a while, cost a lot, and may be difficult to achieve.” Snacks remain Pepsi's best division and “has been an outsized driver of incremental profit expansion due to strong top- and bottom-line growth,” said Powers. International snacks margins “might someday emulate the North American margin structure, but that day is likely far away due to investments required,” said the analyst. Shares of PepsiCo are up 0.9 percent to $80.25.