Oct 6 - Deutsche Bank cut its rating on beverage company Coca Cola Co to "hold" from "buy," citing lower volume expectations, lower equity income and increasing currency headwinds.
Analyst Marc Greenburg said the proposed price raise by bottling companies was timed badly given the current state of the U.S. economy.
"Credit is difficult. Job loss is mounting. Confidence is low. And some very large commodity baskets, which have caused the spike, are receding," Greenburg said in a note to clients.
"Our larger concern is increasingly that rising soft drink price may be occurring at the exact worse time."
Greenburg said the price hike, estimated to be 7 to 9 percent, is aimed at protecting gross margins of the bottlers, which was of little concern to the consumer.
He cut his fourth-quarter earnings estimates for Coca Cola to 61 cents from 63 cents a share. In a seperate note, Greenburg also cut his price targets and 2009 earnings estimates on food and beverage company
Pepsico Inc and its bottlers PepsiAmericas Inc and Pepsi Bottling Group Inc. "Forecast reductions stem from lower volume expectations in the U.S. as bottlers continue to target higher pricing, as well as reduced growth and currency expectations in non-US segments," said Greenburg.