UBS Warburg downgraded Pepsi Bottling (PBG ) to hold from buy.
Analyst Caroline Levy says she's concerned that tough volume comparisons will make it hard for the company to grow volumes in 2003. She cut the 1% North America volume growth forecast to 0.5%, which incorporates growth of one percentage point from water, and a 0.5 percentage point from diet-colas and flavors, which is offset by a one percentage point decline in sugar-cola. Over the past three years, Levy thinks Pepsi Bottling's stock saw multiple expansion due to better than expected net revenue per case gains; in 2003, she believes pricing gains could slow to 2% or less, from 3%.
Levy is keeping her $1.43 2002 earnings per share estimate, but cut the $1.73 2003 estimate to $1.70. She maintains her $31 target.