PepsiCo (PEP)was just upgraded to a buy rating by analysts at Citi.

Analyst Filippo Falorni upgraded shares to buy from neutral. He also raised his price target by $15 to $195. “With a lower/more achievable OSG [organic sales growth] bar and a reset in market expectations, we believe the set-up looks more favorable with PEP’s track record of meeting/beating guidance.

That follows news of a surprise drop in quarterly revenue, even as the company posted better-than-expected earnings. For its most recent quarter, it reported an adjusted EPS of $1.78, which came in above expectations for $1.72. Sales fell about 0.5% to $27.9 billion, which was below the estimate of $28.4 billion.

“PepsiCo management said higher prices were a major driver of the slowdown, and that consumers shifted where they were snacking, consuming more outside their homes. That’s a headwind for PepsiCo, whose strong suit is snacks and beverages consumed at home,” as noted by Barron’s. 

Helping, PEP declared a quarterly dividend of $1.265, a 10% increase year over year. It’s payable on April 1 to shareholders of record at the close of business on March 1.  

Sincerely,

Ian Cooper