PepsiCo Stock Pops on Citi Upgrade

The analyst anticipates stronger margin growth

Deputy Editor
Oct 12, 2020 at 10:07 AM
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The shares of PepsiCo, Inc. (NASDAQ:PEP) are up 0.4% at $139 this morning, after Citi upped its price target to a Street high of $169, and upgraded its rating to a "buy" from "neutral." The analyst said it anticipates solid margin growth for the company, and strong sales growth compared to competitors such as Procter & Gamble (PG) or Coca-Cola (KO). 

On the charts, PEP has been testing support near its year-to-date breakeven, which it managed to climb north of last Friday. The 20-day moving average has also been providing support, ever since the stock's bull gap late last month. The next level PepsiCo stock will need to overcome is the $140 mark, which has kept a lid on the shares for most of the third quarter. 

Coming into today, most analysts were already optimistic on the stock. Of the 12 in coverage, nine considered it a "buy" or better. Plus, the 12-month consensus price target of $151.96 stands at a 7.5% premium to Friday's close. 

Short sellers, meanwhile, have been piling on. Short interest rose 19.9% in the last reporting period. Despite the surge, however, the 7.52 million shares sold short make up a slim 0.54% of the stock's available float. 

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