Bank of America Merrill Lynch On PEP Consumer Outlook

Bank of America Merrill Lynch has issued a report detailing that weak consumer outlook has hit PepsiCo's PEP guidance. According to the report, "Pepsi reported 2Q11 EPS growth of +10% to $1.21, in line with consensus. Reported revenue rose +13.7% to $16.8bn and profits rose +4.8% to $2.8bn (incl. 3pts and 2pts of FX respectively). Divisional profit margin of 18.0% slipped 160bps YoY reflecting acquisitions, higher commodities and spending." PEP has a Buy Rating and a $72 Price Objective. PEP closed at $66.17 a share yesterday.