Pepsi's Earnings Estimates And Price Target Raised At Argus - PepsiCo (NASDAQ:PEP)

Argus raised its EPS estimates and price target for

PepsiCo, Inc.PEP

in its Market Digest out Wednesday. The analysts highlighted key drivers for this decision, including:

PepsiCo is in its second year of a five-year, $5 billion productivity improvement program that will run from 2015–2019. The analysts expect the company to achieve its goal of $1 billion in annual cost savings and productivity gains this year.

PepsiCo reported strong 2Q16 results and raised its 2016 EPS guidance by five cents to $4.71

The analysts forecast more moderate commodity prices and improved productivity to benefit earnings.

In June, the company raised its quarterly dividend by 7.1 percent to $0.753, or $3.01 annually, for a yield of about 2.8 percent.

Argus maintains its Buy rating on the company and raised it price target to $124 from $116. It lifted its 2016 EPS estimate to $4.80 from $4.78 and 2017 EPS estimate to $5.20 from $5.16.

The analysts forecast the company to generate solid growth despite weak consumer spending. "We expect strong results from Frito-Lay North America, growth in health and wellness products, and price increases to translate to positive earnings surprises over the next two years," wrote Argus.

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