) to market perform from buy.
Analyst Skip Carpenter says he believes challenging conditions confronting the company's key growth business, Frito-Lay, will likely persist into the third quarter and will probably not be resolved until into 2003. He thinks until greater visibility and stronger results are generated by Frito-Lay, PEP will meet resistance from multiple expansion dynamic. He believes there is no positive catalyst to the PEP story in the near term given business trends in the second quarter and he believes further EPS risk likely.
Carpenter kept $1.92 2002 EPS and $2.15 2003 estimates, but lowered 13%-14% long-term growth rate assumption to 10%-12%.