Citigroup Reiterates Hold/Low Risk Rating on PepsiCo (PEP)

Citigroup is out with a research report this afternoon, where it reiterates its Hold/Low Risk rating on PepsiCo PEP; it has a $67.00 price target on the stock.

The Citi analysts cited the company's recent 10-k, noting that in 2010, PEP generated positive free cash flow of $5.2 billion in 2010, above the $4.7 billion in free cash flow generated in the year-ago period.

The improvement can be largely attributed to higher operating cash flow, despite higher cap ex spending.

As for valuation, the analysts remarked, “With PEP's shares trading at roughly 13x our CY12 EPS estimate, we find the stock to be fully valued and maintain our Hold (2L) rating and $67 target price.”