March 10 - The economic crisis will strengthen Coca-Cola Co's long-term earnings potential and may help rival PepsiCo take share from weaker competitors in certain international markets, Credit Suisse said.
Analyst C. Laboy upgraded Coca-Cola to "outperform" from "neutral" and said the world's largest soft drinks maker has strong local operations in key markets outside the U.S. and its earnings visibility is superior to most companies.
"We also believe that the underlying health of the Coke system will improve through this crisis while other erode," the analyst said in a note to clients.
Also, Latin American bottlers are in prime financial condition and making extraordinary investments in the company, said Laboy, who raised the price target on the company's stock by $1 to $48.
The brokerage reiterated its "outperform" rating on PepsiCo and added the world's second-largest soft drink maker to its U.S. Focus List. It has a price target of $60 on the company's stock.
PepsiCo will have a difficult first quarter, but that has been absorbed by investors, the analyst said.
"The macro downturn may also help PepsiCo to further take share from weaker competitors in Mexico and the UK -- its stronger markets," Laboy wrote.
Shares of Coca-Cola were up 1 percent at $39.51, while those of PepsiCo were down 1 percent at $46.67 in Monday morning trade on the New York Stock Exchange.