Jefferies starts Coca-Cola with buy, PepsiCo with hold

Jefferies starts Coca-Cola with buy, PepsiCo with hold

Stock Market Predictions

(Global Markets) - Jefferies initiated coverage on Coca-Cola Co (KO.N) with a "buy" rating, citing the company's dominant global product portfolio and an exposure in the emerging markets.

The brokerage also started coverage on PepsiCo Inc (PEP.N) with a "hold" rating, saying it sees the company being hurt by slower growth in both its domestic and international businesses, modest growth in volume and rising commodity costs.

"We expect (Coca-Cola) to deliver another year of mid-single digit volume growth in 2012 driven by the Latin America, Pacific and Eurasia and Africa segments," analyst Jeff Farmer said in a note to clients and started Coca-Cola with an $80 price target.

Earlier this month, Coca-Cola had said it will invest $2 billion in India over the next five years, to compete with PepsiCo in one of the fastest-growing economies.

However, the analyst said PepsiCo's product portfolio is weighted to slower growing geographies and categories, a disadvantage at a time when investors are increasingly pursuing emerging market exposure.

"About 40 percent of (PepsiCo's) operating income is generated outside of the United States, a big number, but one that puts the company at a disadvantage to its primary global competitor, Coca Cola, at almost 80 percent," Farmer said.

He was also concerned over the possible Frito Lay North America spin-off reported by the New York Post.

"Recent precedents such as Kraft (KFT.N), Sara Lee (SLE.N) and Fortune Brands FO.N suggest that large-cap consumer company spin-offs have not resulted in material value creation," Farmer said.

The analyst set a price target of $70 on PepsiCo stock.

Shares of Coca-Cola closed at $66.62 and those of PepsiCo closed at $64.09 on Thursday on the New York Stock Exchange.

(Reporting by Arpita Mukherjee in Bangalore; Editing by Esha Dey)

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Coca-Cola to raise prices in July

Coca-Cola to raise prices in July

Stock Market Predictions

NEW YORK (Global Markets) - Coca-Cola Co plans to raise prices on its soft drinks by 3 percent to 4 percent in July, in addition to a 2 percent increase taken earlier this year, a company spokesman said on Friday.

News of the increases -- to be implemented on July 31 -- was first reported by industry newsletter Beverage Digest, which quoted retail customer pricing letters as saying the increases were due to higher-than-anticipated commodity costs.

Like many food and drink companies, Coca-Cola is facing higher costs for goods like corn, oil and packaging.

Coca-Cola, the world's largest soft drink maker, said earlier this year that it expected to raise prices in that range, but the timing was unknown.

Credit Suisse analyst Carlos Laboy said in a research note that there were concerns the company would wait until after Labor Day, at the end of the summer. That would make it more difficult for other soft drink makers, like PepsiCo Inc and Dr Pepper Snapple, to raise prices on their products during the key summer selling season.

"Today's news should provide some relief for all players in the industry in North America," Laboy wrote.

Beverage Digest reported earlier this month that Pepsi was notifying retailers of price increases of 3 percent to 5 percent between July 10 and around Labor Day.

Coke shares were up 0.2 percent at $65.09 in afternoon trade on the New York Stock Exchange. Pepsi shares were up 0.8 percent at $68.54.

(Reporting by Martinne Geller; editing by John Wallace)

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Coca-Cola says it considers listing in Shanghai

Coca-Cola says it considers listing in Shanghai

Stock Market Predictions

HONG KONG (Global Markets) - Coca-Cola Co (KO.N), the world's largest soft-drink company, said on Wednesday it may explore a possible listing in Shanghai, joining other global firms in testing the waters for a China listing, along with its increasing presence there.

Coke has said it will commit $2 billion in investment into China and last October opened three new plants in Inner Mongolia, Henan and Guangdong.

"We are interested in exploring the opportunity of listing our stock on the Shanghai Stock Exchange," Geoff Walsh, public affairs and communications director for Asia Pacific of Coca-Cola, said in an email reply to Global Markets.

"Obviously, we need to better understand the regulatory framework and listing requirements," Walsh said. "We continue to have positive discussions with Chinese government officials as we look at this opportunity."

Walsh's comments follow a report in the Hong Kong Economic Journal, saying Coca-Cola was studying a possible listing on the proposed international board on the Shanghai Stock Exchange.

HSBC (HSBA.L), Unilever (ULVR.L) and Standard Chartered Plc (STAN.L) have said they want to list on the international board, which was originally slated to be launched in 2010.

The New York Stock Exchange is working with China to launch the country's international board that will allow foreign firms to list on the mainland, in a move seen as a crucial step in developing its capital markets.

(Reporting by Xavier Ng and Donny Kwok; Editing by Jacqueline Wong and Ken Wills)

(This story was corrected in the second paragraph to show Coca-Cola opened new plants in Inner Mongolia, Henan and Guangdong last October (not three plants in Inner Mongolia))

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