Gabelli Lowering Estimates On Dr. Pepper Snapple (DPS)

Gabelli & Co. is lowering its earnings estimates on shares of Dr. Pepper Snapple DPS. In the research note, Gabelli writes, "We are lowering our 2011E EPS to $1.75 per share, from $1.85, due to higher than expected commodity cost headwinds. We believe the brand and distribution investments made by DPS over the last couple of years, combined with a rational pricing environment and improving consumer trends, bode well for DPS' earnings growth despite high commodity costs. We calculate a 2012P PMV of $58, using multiples of 10x, 8x and 7x DPS' 2012P EBITDA for the Concentrate, Packaged Beverages and Latin America business segments, respectively (ex-corporate)." Shares of DPS closed at $36.20 yesterday.