Bank Of America Upgrades Dr Pepper Snapple; Analysts Still Prefer Other Soft Drinks

Analysts at Bank of America raised their price target for Dr Pepper Snapple Group Inc. DPS on Friday from $70 to $75, but maintained a Neutral rating.

Specialist Bryan Spillane thinks Dr Pepper Snapple’s valuation -- lower than those for several of its bigger competitors -- is justified, as its main contenders, The Coca-Cola Co KO and PepsiCo, Inc. PEP, enjoy larger benefits derived from their scales and “more diversified business models.”

But, while some Wall Street research firms are bullish on these two industry behemoths, others are not huge fans. Below is a look at these and another, smaller company that analysts are recommending.

Related Link: Bank Of America Raises Dr. Pepper Snapple Group Price

The Big Boys

Analysts seem to be fond of PepsiCo since the end of the third quarter; at least six major research firms have issued recommendations for the stock, most of them, positive. On December 5, Evercore ISI initiated coverage with a Buy rating, and a $115 price target. Earlier in the quarter, both Barclays and Deutsche Bank reiterated their ratings (Overweight and Buy, respectively), setting price targets of $102.

Prospects for Coca-Cola are not as uniform. While SocGen downgraded the stock to a Sell in late-October, Tigress Financial Partners analyst Ivan Feinseth upgraded the stock rating from a Neutral to a Buy, as he sees the company “undergoing a multi-year transition that will drive an acceleration in economic profit.”

A Smaller Option

Cott Corporation (USA) COT, a lesser-known option, likewise falls into this category. Over the fourth quarter, four out of five mainstream research firms recommended Buying the $606.6 million market cap beverages producer stock. Most recently, Citigroup issued a Buy rating and set an $8 price target. Meanwhile, Deutsche Bank believes the stock could climb up to $9.