Zacks Analyst Blog Highlights: PepsiCo, Pepsi Bottling Group, Dr Pepper Snapple Group Inc., Vale and Rio Tinto

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CHICAGO--(Business Wire)--
Zacks.com announces the list of stocks featured in the Analyst Blog. Every day
the Zacks Equity Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the blog include:
PepsiCo (NYSE: PEP), Pepsi Bottling Group (NYSE: PBG), Dr Pepper Snapple Group
Inc. (NYSE: DPS), Vale (NYSE: VALE) and Rio Tinto (NYSE: RTP).

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Here are highlights from Tuesday`s Analyst Blog:

PepsiCo, PBG Thrust & Parry

There is sword-play between PepsiCo (NYSE: PEP) and Pepsi Bottling Group (NYSE:
PBG). Back on April 19th, PepsiCo proposed to acquire all of the outstanding
shares of common stock of the Pepsi Bottling Group at $29.50 per share. However,
on May 5th, the Board of Directors of Pepsi Bottling Group rejected a proposal
as grossly undervaluing the company.

Then on May 11th, PepsiCo sued Pepsi Bottling Group on the grounds of not giving
PepsiCo`s two board members proper notice of the Pepsi Bottling Group board
meeting, in which the bottler's board voted to reject the PepsiCo`s offer and
approved a shareholder rights plan -- aka a "poison pill."

We expect PepsiCo will ultimately announce a higher offer for the Pepsi Bottling
Group. PepsiCo obviously believes that the shares of Pepsi Bottling Group are
attractive. In addition, management of PepsiCo is seeking not only to invest its
cash flow in a growth vehicle, but also gain more control over the distribution
of its products.

Over the last year, the company acquired Pepsi-Cola Batavia Bottling, which
serves parts of upstate New York; Lane Affiliated Companies, the eighth largest
Pepsi bottler in the U.S. with operations in Colorado, Arizona and New Mexico;
and Better Beverages, a Pepsi-Cola and Dr Pepper Snapple Group Inc. (NYSE: DPS)
franchised bottler that serves portions of central Texas.

Iron Miners Get Price Adjustment

The mining market has been waiting with some anxiety the news on the
renegotiation of the price of iron ore with China for 2009. As we said here many
times, we expect a price cut between 30% and 40%.

In the particular case of Vale (NYSE: VALE), price adjustment should be less
intense, as in 2008 Vale got a lower price adjustment. The difference in the
price cut for Vale and the other mining companies should be something around 400
and 500 basis points.

Today Rio Tinto (NYSE: RTP) announced that it reached a deal with Nippon Steel
for a price reduction between 33% and 44% for 2009, depending on the quality of
the iron ore shipped. This was the first real deal announced, and should
establish a basis for renegotiation with Chinese clients.

After the announcement, we reinforce our view that Vale's renegotiation with
Chinese clients should reach a price reduction between 25% and 35%. It is
important to remember that Vale's iron ore is of higher quality.

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