2 Food and Beverage Stocks Set to Rise After Upgrades

Morgan Stanley is appealing to contrarians regarding KDP

Deputy Editor
Jul 6, 2023 at 9:15 AM
facebook X logo linkedin


Beverage and food stocks Keurig Dr Pepper Inc (NASDAQ:KDP) and Sweetgreen Inc (NYSE:SG) are both moving higher before the open following bull notes.

A Contrarian Case for KDP

Keurig Dr Pepper stock was last seen up 1.3% before the bell, after Morgan Stanley upgraded the shares to "overweight" from "equal weight" with a contrarian point of view. Specifically, the analyst says the stock's valuation is too low, with too much risk being priced in amid easy-to-see refreshment beverage trends.

There's room for more analysts to jump on the bullish bandwagon, as the brokerage bunch is split right now, with six rating KDP a "hold" or worse, while six said "buy" or better. Options traders are also bearish, per the security's Schaeffer's put/call open interest ratio (SOIR) of 1.65, which sits in the elevated 92nd percentile of annual readings.

Though today's premarket price action bodes well for the beverage stock, it likely won't be enough to help it overcome a significant 11% year-to-date deficit. It could, however, push Keurig Dr Pepper stock back above its 50-day moving average for the first time since early May.

New Street-High PT for Sweetgreen Stock

Bank of America upgraded Sweetgreen stock to "buy" from "neutral", with a Street-high price target to $17 from $9, helping the equity move 6% higher ahead of the open. The firm said it expects urban fast-casual restaurant demand to rise thanks to its innovative menu and loyalty program, and praised its automation efforts to control labor costs.

Contrary to its sector peer, SG was already up more than 52% in 2023 before today. This comes even after the stock shed 32% over the last nine months. Should today's positive price action hold, then the restaurant stock will pop to its highest level since December. 

Sweetgreen stock also has a decent amount of pessimism to be unwound. Of the nine covering analysts, five rated the shares a tepid "hold" coming into today. The stock's SOIR of 1.22 also stands higher than 79% of annual readings. 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI