DPS cut down to size

DPS cut down to size

Analyst group UBS has cut its rating on Dr Pepper Snapple Group, warning that the drinks maker's share price looks overweight in the market.

UBS today (23 June) cut Dr Pepper Snapple (DPS) from buy to neutral.

It said that DPS is trading at a higher multiple of forecast 2010 earnings than either The Coca-Cola Co or PepsiCo, which it said is not justified given its rivals greater international scope.

DPS' share price slipped by 0.6% in early trading on the New York Stock Echange today.

Analysts and media have tipped the group for success following solid trading and licensing deals from the respective Coca-Cola and PepsiCo bottler deals that are set to net DPS more than US$1.5bn.