U.S. Beverages Scanner Update: Soft drinks remain resilient

Research evidence excerpt

U.S. Beverages Scanner Update: Soft drinks remain resilient

erstood and priced in. The stock continues to react constructively to fundamental business results, as we

saw in Q1 of 2026. As such, we believe Beverages will continue to outperform and continue to drive appreciation.

We forecast 18% and 9% YoY EPS growth NTM and NTM+1, respectively, leaving us in line vs. consensus on NTM+1 EPS. We

apply a target multiple of 15x to arrive at our target price.

We rate Coca-Cola Market-Perform, with a PT of $83. Coke is a high-quality compounder, with an honorable mention in

Functional Beverages (Protein, Hydration). With demand for zero-calorie cola accelerating and the undisputed winning brand

in the category, their CSD base is also poised to accelerate globally. While we are bullish on their North America business, we

are bearish vs. consensus in Latin America due to our expected impact of the 2026 excise tax in Mexico, which will dampen

consumption and price realization.

We forecast 5% and 5% YoY EPS growth NTM and NTM+1, respectively, making us bearish vs. consensus on NTM+1 EPS by

~3%. We apply a target multiple of 24.0x to arrive at our target price.

We rate PepsiCo Market-Perform, with a PT of $134. Due to their Snacks business, PEP has the most challenged Category

Health in our coverage, and the company is losing share. While Beverages is a more attractive category, share losses across

subcategories have also challenged organic momentum here. These weaknesses in their NA business are offset by a healthy

and productive International business, which we believe is well understood.

We forecast 2% and 2% YoY EPS growth NTM and NTM+1, respectively. We apply a 15.4x target multiple to arrive at our price

target.

We rate Monster Market-Perform, with a PT of $95.