PepsiCo Is a Conviction Buy: Goldman

Goldman Sachs has added PepsiCo to its conviction-buy list.
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NEW YORK (TheStreet) -- Goldman Sachs has added PepsiCo (PEP) - Get Report to its conviction-buy list ahead of the expected re-acceleration of earnings per share to the high-teens in the second half of 2010, compared with 5% to 6% in the first half of the year.

Goldman Sachs predicts that PepsiCo is poised to deliver a 13% to 14% earnings per share compound annual growth rate over the next few years; "best-in-class among large-cap staples," it said.

"In addition, PEP's investment in new product innovation and marketing could eventually drive improvement in market-share performance."

Goldman Sachs has a 12-month price target for PepsiCo of $76, or a 17% return potential, including the dividend, as the investor sentiment towards the broad beverage sector continues to firm up and amid ongoing signs of stronger U.S. beverage demand.

>> Who Owns Pepsi?: Prince Al-Waleed

Goldman Sachs expects

Dr Pepper Snapple

(DPS)

,

Coke

(KO) - Get Report

and

Coca-Cola Enterprises

(CCE)

management to confirm this trend.

PepsiCo

(PEP) - Get Report

stock is up 0.5% to $66.89 in Wednesday trading.

-- Reported by Andrea Tse in New York

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