By Carly Forster
Care to enjoy a nice, cold can of Dr. Pepper?
Dr. Pepper in the News
Dr Pepper Snapple Group Inc. (NYSE:DPS) has fallen 1% in their first quarter along with The Coca-Cola Company (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP). This is the ninth consecutive year that carbonated soft drink sales have declined. However, while non-carbonated beverages like bottled water, sports drinks, teas and juices have been increasing within Coca-Cola and Pepsi, the same cannot be said for Dr.Pepper. In fact, Dr. Pepper’s NCB bottler case sales have dropped 2% on a year-over-year basis. This is suspected to be due to the lack of strong Dr. Pepper brands in some of the increasingly popular non-carbonated drink category.
A Financial Experts Perspective
On Tuesday, June 24, Citigroup analyst Wendy Nicholson downgraded Dr Pepper Snapple Group Inc. (NYSE:DPS) from BUY to Neutral and maintained a $61 price target. She reasoned, “Snapple has historically been an iconic brand, but it is too small to really move the needle for Dr. Pepper Snapple, and overall, Dr. Pepper Snapple’s stills portfolio is struggling.” This was Nicholson’s first time making a recommendation for Dr. Pepper.
Nicholson’s Past Recommendations
Nicholson has a history of making recommendations in the beverage and retail sectors, such as The Coca-Cola Company (NYSE:KO) and The Procter & Gamble Company (NYSE:PG), earning her a +9.6% average return on all stocks and an 80% success rate in making recommendations.
On April 15 of this year, Nicholson reiterated a BUY for The Coca-Cola Company (NYSE:KO) with a $44 price target. She noted, “We are encouraged that despite a confluence of headwinds – incl. one less selling day, the shift in timing of Easter, the new soda tax in Mexico, unrest in Russia, and robust health & wellness concerns pressuring the CSDs business globally – KO managed to deliver 2 pts of global volume growth.” Since then, Coca-Cola has gone up from $39.88 to $41.85, earning Nicholson a +13.0% average return on the stock.
In addition, on January 24 of this year, Nicholson reiterated a BUY rating for Proctor & Gamble with a $95 price target. She explained, “We are confident that PG’s market shares can continue to expand once The Procter & Gamble Company (NYSE:PG)’s new products actually launch and PG’s marketing support kicks in.” Since then, Proctor & Gamble has gone up from $78.55 to $79.01, earning Nicholson a +7.9% average return on the stock.
However, Nicholson has not always been so lucky with her recommendations. On January 13 of this year, she maintained a BUY rating for Sodastream International Ltd (NASDAQ:SODA). While recognizing the company had some problems she “hoped SODA could have managed thru more effectively (e.g. product mix).” With that being said, she took “a bit of a leap of faith” with her BUY rating. Since then, Sodastream International has gone down from $36.94 to $34.71, earning Nicholson a -21.3% average return on the stock.
Conclusion
Will you be able to trust Nicholson on her latest recommendations based on her past performance history?
Carly Forster writes about stock market news. She can be reached at [email protected]
