Credit Suisse analyst Kaumil Gajrawala upgraded PepsiCo to Outperform from Underperform with a price target of $144, up from $138. Pepsi is a “high-quality asset trading at a discount with near, medium, and long-term drivers,” Gajrawala tells investors in a research note. The analyst says the comany’s multiple has contracted five-turns just as business trends are set to accelerate. Gajrawala sees signs that North America beverages, which represent one-third of PepsiCo’s sales and are the weakest division, as poised to improve. Further, in the near-term, COVID-19 highlights the defensive nature of PepsiCo, which has strong positions in water, sports drinks, juice brands and should benefit from snack pantry loading, contends the anlayst.
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