NEW YORK ( TheStreet) -- Coca-Cola ( KO) shares are falling in early trading Friday, after J.P. Morgan ( JPM) downgraded Coca-Cola from overweight to neutral.

"In general, we think Coke is doing almost everything right, but we think that relative to the group, this is priced in," the analysts wrote in a note to investors on Friday.

The analysts believe that Coke is reaching the peak of the "boom-bust cycle" and is now in a phase of sustained strong performance. They write that its tough to see significant company-specific positive marginal change from here.

J.P. Morgan research points out that Coke is trading at an 18% premium to the beverage group it covers. It believes that this premium is warranted, but unlikely to expand from here -- foreign exchange rates drove much of this outperformance and some of those benefits for 2010 are priced in already, according to the analysts.

"For 2010, we prefer to go with cheaper stocks," they write. "Coke has re-established its premium to the group over the past few years, due to better organic growth, confidence in management and lower exposure to the US consumer."

Coke, along with many other beverage-makers, has been struggling for volumes in developed markets including North America, Japan and Western Europe, all of which showed volume declines in the third quarter, according to J.P. Morgan.

Coke has offset softer volumes with higher pricing. Meanwhile, volume growth in emerging markets remain strong.

Coke stock has fallen by 2.3% to $54.90 in morning trading, while rival PepsiCo ( PEP) has slipped 0.8% to $60.50. Dr Pepper Snapple ( DPS) has fallen by 1.2% to $28.70, while Jones Soda ( JSDA) has risen by 6.7% to 48 cents.

-- Reported by Andrea Tse in New York

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