PepsiAmericas Shares Jump on Upgrade

Shares rose $1.86, or 7.4 percent, to $27.05 Wednesday.

Analyst Marc Greenberg upgraded the shares to "Buy" from "Hold" and said in a note to investors Tuesday night that the company's weak stock price lately has been "unwarranted."

The shares dropped nearly 24 percent since the start of the year partly due to concerns that higher ingredient and commodity costs for things like resin, high fructose corn syrup and aluminum would pressure profit for the rest of the year. Consumers have also been switching from soda to non-carbonated waters and juices.

"PepsiAmerica's differentiated growth story has been forgotten amidst ongoing input cost concerns and domestic carbonated soft drink weakness," Greenberg said. "We expect another year of 10 percent plus earnings-per-share growth will help investors to remember."

Greenberg said investors haven't fully appreciated the opportunity for the country overseas, especially in Central and Eastern Europe.

He added that the company can offset any weakness in soda revenue with strong growth in non-carbonated beverages like Lipton tea, Sobe juice drinks and Propel water.

Plus, he said PepsiAmericas has "shown good ability to contain" commodity cost pressures.