Shares of global soda giants Coca-Cola Co. (KO) and PepsiCo Inc. (PEP) continue to fall on Thursday morning after sinking on a bearish analyst note from BMO Capital. (See also: Coke vs. Pepsi Earnings Recap.)

Analysts Amit Sharma and Drew Levine cut their ratings on the leading American soda makers to market perform from outperform, as part of a larger re-rating of their beverage coverage “to shift focus to stocks with higher upside potential.” BMO attributed the downgrade to valuation, noting that both stocks are trading at their highest levels relative to projected earnings in a decade and suggesting that neither Pepsi or Coke’s earnings growth is likely to accelerate in next 12 to 18 months.

Further, despite the heightened chatter on the Street regarding forthcoming food and beverage industry consolidation, Sharma and Levine “believe that none of the proposed M&A scenarios for KO (e.g., with Kraft Heinz (KHC)/3G/Buffett) or PEP (e.g., KHC/3G; merger with Mondelez International Inc. (MDLZ)) offer a compelling strategic rationale or a willing seller.”

Upgrading Cott, Dr Pepper

BMO assigned a new price target of $120 for Purchase, N.Y.-based Pepsi, indicating a 3.1% upside from Thursday morning at $116.40. Coke was given a $46 price target, just above its current price of $45.22. However, the analysts note that a “Trump trade” mentality and and “safety” concerns could continue to support elevated valuations for the multinational market leaders.

At the same time, BMO upgraded shares of beverage manufacturers Dr Pepper Snapple Group Inc. (DPS) and Cott Corp. (COT) to outperform from market perform, citing their “depressed” valuations and more attractive earnings growth potential.

As soda sales declined in the U.S. for the 12th consecutive year, sugary soft drinks makers have attempted to diversify into the premium and bottled water space. The larger strategy explains their heightened focus on innovation and M&A, and why PepsiCo is reportedly interested in making a bid for coconut water leader Vita Coco. (See also: Why Pepsi May Spend $1 Billion on a Madonna-Backed Coconut Water Company.)

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