NEW YORK (AP) -- Shares of some beverage companies traded mostly lower on Wednesday as an analyst downgraded soft drink powerhouses Coca-Cola Co. and PepsiCo Inc.
Kaumil Gajrawala of UBS said in a client note that Coca-Cola's volume growth is likely to slow this year to about 3.8 percent from 5 percent. The analyst anticipates that the Atlanta company, whose products include Coca-Cola, Sprite and Dasani, will likely not have as good of a year as it did in 2011, when earnings climbed by about 10 percent.
"We see limited upside potential in the face of currency tailwinds and slowing volume growth," Gajrawala wrote.
The analyst cut Coca-Cola's rating to "Neutral" from "Buy" and trimmed its price target to $70 from $73. The company's stock declined $1.47, or 2.1 percent, to $67.87 in afternoon trading. The shares have traded in a 52-week range of $61.29 to $71.77.
Gajrawala also lowered PepsiCo, whose products include Diet Pepsi and Mountain Dew, to "Neutral" from "Buy" and reduced its price target to $64 from $72. Shares of the Purchase, N.Y., company slipped 95 cents to $64.71.
Coca-Cola and PepsiCo are also dealing with news that the Food and Drug Administration is stepping up testing for a fungicide that has been found in low levels in orange juice. FDA officials said Tuesday that they aren't concerned about the safety of the juice but will increase testing to make sure the contamination isn't a problem. Fungicides are used to control fungi or fungal spores in agriculture.
Coca-Cola markets Minute Maid orange juice, while PepsiCo has the Tropicana brand.
Elsewhere in the sector, Dr. Pepper Snapple Group Inc.'s stock fell 47 cents to $38.15 and Monster Beverage Corp. dropped $2.30, or 2.4 percent, to $92.95. Shares of National Beverage Corp. dipped 16 cents to $16.20.
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