Back to top

Analyst Blog

Shares of Dr Pepper Snapple Group Inc. (DPS - Analyst Report) reached a 52-week high of $50.37 on Thursday, May 15, 2013 following the announcement of solid first quarter 2013 earnings results and positive 2013 outlook on Apr 24. The closing price of this beverage company on May 15 was $50.36, yielding a year to date return of 11.4%.

Share Price Drivers

Share prices have been rising since Dr Pepper Snapple reported first quarter 2013 adjusted earnings of 53 cents, which is 15.2% year-over-year increase on the back of sales growth and increase in adjusted operating income. Earnings also surpassed the Zacks Consensus Estimate by 12.8%.  

Dr Pepper's net sales grew 1% year over year to $1.38 billion on the back of gains from favorable price/mix. Gross profit improved 3.0% in the quarter to $796 million. Adjusted operating income increased 9.7% in the quarter to $204 million on the back of gains from improving productivity.

The company maintained its prior guidance for fiscal 2013. Full-year 2013 adjusted earnings are expected to be in the range of $3.04 to $3.12 per share. Dr Pepper expects 2013 sales to grow approximately 3%.  

The solid quarterly results and positive full-year 2013 outlook for the upcoming quarters led to an upward bias in estimate revisions. In fact, the Zacks Consensus Estimate for 2013 and 2014 increased a respective 1.0% and 0.3% to $3.10 and $3.33 per share over the last 30 days. Moreover, DPS has beaten the Zacks Consensus Estimate in three out of the past four quarters, with an average surprise of 3.58%.

Dr Pepper carries a Zacks Rank #3 (Hold).

Some other companies from the consumer staple sector that are performing well include The Coca-Cola Company (KO - Analyst Report) and Pepsico, Inc. (PEP - Analyst Report). While Flower Foods carries a Zacks Rank #1 (Strong Buy), Coca Cola and Pepsico carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.