Citi upgrades Pepsico following Q4 earnings beat: 4 big analyst picks

Investing.com — Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Pepsico, Corteva , Trimble, and Fortinet.

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Pepsico earns an upgrade at Citi

Citi upgraded PepsiCo (NASDAQ:PEP) to Buy from Neutral with a price target of $195.00 (from $180.00), following the company’s reported better-than-expected Q4 results last week.

The bank noted that the company “has been a heavily debated stock over the last six months after providing initial 2024 guidance at the high-end of LT targets at Q3 (instead of Q4 historically), which the market expected to be cut”. This expectation was realized in Q4 when PepsiCo adjusted its Organic Sales Growth (OSG) target to "at least 4%" from the previously higher range of 4-6%. With the OSG target now more realistic and a reset in market expectations, Citi sees a more favorable set-up, given the company’s consistent track record of meeting or exceeding guidance.

While acknowledging that volumes may remain challenged in the first half of 2024, and expecting Coca-Cola (NYSE:KO) to exhibit better volume trends, Citi believes these factors are already priced into PepsiCo's stock.

Corteva gains following an upgrade

Corteva (NYSE:CTVA) shares rose more than 2% yesterday after Loop Capital upgraded the company to Buy from Hold and raised its price target to $65 from $57, as reported in real-time on InvestingPro.

The analysts’ optimism stems from Corteva's 2024 earnings guidance surpassing expectations, combined with its reaffirmed EBITDA margin target of 21-23% for next year, highlighting the company's robust growth prospects. Additionally, a recent U.S. Court decision to vacate the EPA’s approvals of dicamba is expected to boost demand for Corteva's Enlist-based seed platforms and Enlist-branded herbicide, enhancing the company's earnings outlook.

More generally, CTVA’s relative outperformance versus peers in the Agriculture input space underscores the attractiveness of its seeds business vis-à-vis the crop protection chemicals most competitors are focused on, in our view.

Two more upgrades

Piper Sandler upgraded Trimble (NASDAQ:TRMB) to Overweight from Neutral with a price target of $68.00 (from $51.00), following the company’s reported Q4 beat, which resulted in a stock price gain of more than 4% yesterday.

Daiwa Securities upgraded Fortinet (NASDAQ:FTNT) to Outperform from Neutral with a price target of $75.00 (from $62.00).

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