Pepsi slashed at JPMorgan, ‘more attractive options elsewhere': 4 big analyst cuts
Investing.com — Here is your Pro Recap of the biggest analyst cuts you may have missed today: downgrades at PepsiCo, Masonite International, Plug Power , and Disc Medicine.
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PepsiCo cut to Neutral at JPMorgan
JPMorgan downgraded PepsiCo Inc (NASDAQ:PEP) to Neutral from Overweight and cut its price target to $176.00 from $185.00 in conjunction with its 2024 Year Ahead Outlook.
While acknowledging that there are no fundamental issues with Pepsico and expressing confidence in the company's ability to achieve its 2024 outlook (which includes a high-end of its long-term financial algorithm of 4-6% organic sales growth and high single-digit FX-neutral EPS growth), the analysts believe the potential for upward estimate revisions is diminishing.
The analysts see more promising opportunities in the Beverages sector with Overweight-rated companies like Coca-Cola (NYSE:KO) and Keurig Dr Pepper (NASDAQ:KDP), which are expected to exhibit higher quality top-line growth in 2024 and don't face the narrative challenges associated with GLP-1 concerns.
Masonite International downgraded at Baird
Baird downgraded Masonite International (NYSE:DOOR) to Neutral from Outperform with a price target of $92.00 (from $106.00), as reported in real-time on InvestingPro.
The analysts explained that the downgrade is a response to Masonite's recent announcement of acquiring PGT Innovations (NYSE:PGTI) for $3 billion, which resulted in a nearly 16% drop in Masonite’s shares on Monday.
According to the analysts, this acquisition alters the previous investment thesis for Masonite, introducing a higher risk profile due to factors such as increased overall leverage, the possibility of a competing offer, and typical integration challenges. These risks, according to the analysts, are likely to need time to be properly digested, overwhelming the potential benefits of solid EPS growth expected by 2026/2027.
We think the deal keeps shares rangebound in the near term. PGTI is a good asset, but we're not fully convinced it needs to be combined with DOOR under one roof.
Two more downgrades
Piper Sandler downgraded Plug Power (NASDAQ:PLUG) to Underweight from Neutral and cut its price target to $2.30 from $6.50. As a result, shares plunged more than 5% pre-market today.
Morgan Stanley downgraded Disc Medicine (NASDAQ:IRON) to Equalweight from Overweight with a price target of $65.00 (from $56.00).
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