J.P. Morgan lowers its rating on PepsiCo (PEP.US) and expresses greater optimism for competitors like Coca-Cola (KO.US).

Jefferies downgrades PepsiCo (PEP.US) to "Hold" from "Buy" and cuts its price target to $170 from $171. Analyst Kaumil Gajrawala says the company sees limited upside to its current trading levels, noting that its Frito-Lay business is still struggling and expects this to weigh on its P/E. Across the industry, Jefferies sees more value in Coca-Cola (KO.US), Keurig Dr Pepper (KDP.US) and Monster Beverage (MNST.US). All three competitors are rated "Buy."

The analyst says: "Frito is still in the normalization phase and seems to need a few quarters to see a turn. It's taking longer than we anticipated. While we believe the business will be good in the long run, we're not sure when or how. The return on investment is not high, and 80% of the mainstream business is struggling."

Gajrawala and his team forecast organic sales growth for PepsiCo's Frito-Lay business of just 0.2% by 2025. In beverages, they expect volume to decline 1%, with price/combination growth of 2%.