Dr Pepper Snapple Group ( ) is scheduled to report their second quarter results before the market opens on Thursday, August 13. Based on our analysis, we at EarningsPreviews.com are expecting DPS to report better than expected results that exceed Wall Street’s consensus expectations.

Analyst Expectations

We are forecasting revenues of $1.51 billion and EPS of $.50. This would represent a 1% increase in revenues from last year’s $102.67 billion in the same period. The current analyst consensus estimates calls for revenues of $1.50 billion and EPS of $.49.

Last quarter, Dr Pepper Snapple delivered stronger than expected results and increased its full year guidance. The outlook for the company’s carbonated soft drink segment continues to improve. Sales volumes have been improving, while pricing pressures appear to have subdued.

DPS’s portfolio of soft drinks appears to be well positioned to fuel future growth. As the economy begins to recover, we would also anticipate stronger performances from their premium brands, such as Snapple. DPS shares currently trade at a discount to primary competitors Coca Cola ( ) and Pepsi ( ), but we would expect that gap to close in the future.

Stock Performance

Since the beginning of 2009, Dr Pepper Snapple’s shares have gained 45% which has well outpaced the less than 6% gain in the Dow Jones industrial average.

Valuation

Shares are now trading at 12x consensus 2010 EPS estimates. This is a discount to the relative valuations of their peer group. While DPS’s shares have experienced a nice run already this year, they still trade below the valuation levels of their peers. We would expect this valuation gap to close in the future which would be an incremental positive for DPS.

Recommendation: Buy with a $26 price target.