PepsiCo stock takes a hit after downgrade by long-time bullish analyst on valuation concerns

Shares of PepsiCo Inc.
PEP,
-0.92%
took a 0.9% hit in morning trading Monday, after the beverage and snacks giant was downgraded by who was Wall Street’s second-biggest bull, citing concerns that they have rallied too far. Morgan Stanley’s Dara Mohsenian cut his rating to equal weight from a “multi-year” run at overweight, while keeping his stock price to $210. That’s the second-highest target of the 22 analysts surveyed by FactSet who cover PepsiCo, below only the $220 target of Cowen’s Vivien Azer. Mohenian said that after a “strong” second-quarter report on July 13, he said the stock’s large recent outperformance suggests catalysts have been “played out,” leaving “limited further upside.” The stock has rallied 3.3% year to date, while the Consumer Staples Select Sector SPDR exchange-traded fund
XLP,
-0.18%
has lost 0.5% and the S&P 500
SPX,
+0.23%
has rallied 17.7%.