Headquartered in Burlington, Massachusetts, and Frisco, Texas, Keurig Dr Pepper Inc. (KDP) is a beverage company with a market cap of $44.7 billion. KDP specializes in a diverse portfolio of popular brands across soft drinks, coffee, and specialty beverages, offering innovative and convenient products that cater to a wide range of consumer tastes.
KDP has underperformed the broader market over the last year. The stock has gained 6.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 36.4%. Also, in 2024, the stock is down 1.2% compared to SPX’s 25.2% increase on a YTD basis.
Zooming in further, KDP has underperformed the Invesco Food & Beverage ETF (PBJ). The exchange-traded fund has gained 4.5% on a YTD basis.
Keurig Dr Pepper shares fell 12.1% in October after reporting modest Q3 growth and following a major share sale by JAB Holding, which pressured the stock. Despite this, the company showed potential through volume-driven sales growth and strategic acquisition of energy drink brand Ghost, and its recent price drop has raised the dividend yield to 2.8%, appealing to income-focused investors.
Also, Keurig Dr Pepper dropped over 4% on Oct. 24 after reporting Q3 net sales of $3.89 billion, which missed the consensus estimate of $3.92 billion.
For the current fiscal year, ending in December, analysts expect KDP’s EPS to grow 7.3% year over year to $1.92 on a diluted basis. The company's earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 16 analysts covering KDP stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” and seven “Holds.”
This configuration is slightly more bullish than three months ago, with seven suggesting a “Strong Buy.”
On Oct. 29, Bill Chappell from Truist Financial Corporation (TFC) maintained a ‘Hold’ rating on Keurig Dr Pepper. However, Barclays analyst Lauren Lieberman maintained a ‘Buy’ rating on KDP with a price target of $39.
The mean price target of $38.35 represents a 16.5% premium to KDP’s current price levels. The Street-high price target of $42 suggests an upside potential of 27.6%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
