In a note to clients Thursday, Jefferies raised its price target for PepsiCo (NASDAQ:) to $211 from $209 per share. The firm maintained a Buy rating on the stock and said it expects PepsiCo Beverages North America (PBNA) margins to finally inflect.

Analysts explained that the year after PepsiCo bought its US bottlers, PBNA margins were 18%, and today they are 11%.

“PBNA’s margins have declined 700bps since Pepsi’s 2010 acquisition of bottlers PepsiCoAmericas (PAS) and Pepsi Bottling Group (PBG),” wrote Jefferies. “During that time, PBNA soft drink market share is down -3pp and volumes are -3% lower (Euromonitor).”

“With a revamped portfolio, a higher asset base, moderating capex spending, stable input costs and importantly new management prioritizing margins, we expect PBNA margins to finally inflect.”

The firm forecasts PBNA margins reaching 14% by 2028, at an average of +65bp a year, adding 9-12c to Jefferies’ out-year EPS estimates.

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