Keurig Dr Pepper, Inc (NASDAQ:KDP) Receives Consensus Rating of "Moderate Buy" from Brokerages

Key Points

• Analysts maintain a “Moderate Buy” consensus on Keurig Dr Pepper, with 11 buys and eight holds among 19 firms. The average 12-month price target is approximately $34.94, with recent targets reaching as high as $40.
• KDP plans to sell its Chobani stake and a Pennsylvania manufacturing facility for $925 million in pretax proceeds, using the cash to reduce debt ahead of its planned business split while maintaining a broader commercial partnership with Chobani.
• The company exceeded quarterly expectations, reporting $0.57 in adjusted EPS versus a $0.54 consensus estimate and $7.31 billion in revenue, up 75.6% year over year. Institutional investors own 93.99% of KDP’s outstanding shares.

Shares of Keurig Dr Pepper, Inc (NASDAQ:KDP - Get Free Report) have been given an average rating of "Moderate Buy" by the nineteen ratings firms that are currently covering the firm, MarketBeat reports. Eight investment analysts have rated the stock with a hold rating and eleven have issued a buy rating on the company. The average 12-month target price among brokerages that have covered the stock in the last year is $34.9412.

KDP has been the topic of a number of research analyst reports. Barclays boosted their target price on Keurig Dr Pepper from $36.00 to $38.00 and gave the stock an "overweight" rating in a research note on Monday, August 10th. HSBC upgraded Keurig Dr Pepper from a "hold" rating to a "buy" rating and set a $40.00 price target on the stock in a report on Thursday, August 13th. Sanford C. Bernstein set a $39.00 price objective on Keurig Dr Pepper in a research report on Wednesday, July 8th. The Goldman Sachs Group upgraded Keurig Dr Pepper from a "neutral" rating to a "neutral" rating in a research note on Thursday, June 25th. Finally, JPMorgan Chase & Co. raised their target price on Keurig Dr Pepper from $33.00 to $38.00 and gave the company an "overweight" rating in a research report on Thursday, July 23rd.

Insiders Place Their Bets

In related news, Director Aaron E. Alt purchased 7,862 shares of Keurig Dr Pepper stock in a transaction that occurred on Tuesday, August 25th. The stock was bought at an average price of $31.83 per share, for a total transaction of $250,247.46. Following the completion of the transaction, the director owned 7,862 shares in the company, valued at $250,247.46. This represents a ∞ increase in their ownership of the stock. The acquisition was disclosed in a filing with the SEC, which is accessible through this hyperlink. Insiders own 0.34% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in KDP. BlackRock Inc. purchased a new stake in shares of Keurig Dr Pepper during the 2nd quarter worth approximately $4,697,645,000. California State Teachers Retirement System grew its holdings in Keurig Dr Pepper by 2,997.3% during the second quarter. California State Teachers Retirement System now owns 68,048,910 shares of the company's stock valued at $2,079,099,000 after purchasing an additional 65,851,849 shares during the period. T. Rowe Price Investment Management Inc. bought a new position in Keurig Dr Pepper during the fourth quarter valued at $727,667,000. Barrow Hanley Mewhinney & Strauss LLC bought a new position in Keurig Dr Pepper during the second quarter valued at $767,105,000. Finally, Norges Bank purchased a new stake in Keurig Dr Pepper in the fourth quarter worth $568,361,000. 93.99% of the stock is currently owned by hedge funds and other institutional investors.

Keurig Dr Pepper News Summary

Here are the key news stories impacting Keurig Dr Pepper this week:

• Positive Sentiment: KDP will sell its minority stake in Chobani and a Pennsylvania manufacturing facility back to Chobani for $925 million in pre-tax proceeds. Management said the cash will support deleveraging, potentially improving the company’s balance sheet following its acquisition of JDE Peet’s. Keurig Dr Pepper to sell back Chobani stake for $925 million
• Positive Sentiment: The transaction streamlines KDP’s operations ahead of its planned business split, allowing the company to focus capital and management attention on its core beverage businesses while monetizing a non-core investment and asset. Keurig Dr Pepper Advances Strategic Priorities Through Enhanced Partnership with Chobani
• Positive Sentiment: Despite selling its equity stake and facility, KDP is expanding its commercial relationship with Chobani. Chobani plans to invest approximately $1.2 billion in a Pennsylvania manufacturing campus, which should support a continuing strategic supply and distribution partnership. Chobani to Invest $1.2B in Pennsylvania Manufacturing Campus
• Neutral Sentiment: The deal removes KDP’s exposure to potential future gains from Chobani, and investors will still assess execution risks surrounding the planned corporate separation and the integration of JDE Peet’s. However, the upfront proceeds and debt-reduction objective are viewed as favorable for shareholder value. Keurig Dr Pepper to Sell Chobani Stake, Pennsylvania Campus for $925 Million

Keurig Dr Pepper Stock Performance

NASDAQ KDP opened at $31.89 on Wednesday. Keurig Dr Pepper has a 1 year low of $24.88 and a 1 year high of $33.82. The company has a debt-to-equity ratio of 0.74, a current ratio of 0.48 and a quick ratio of 0.28. The firm has a market cap of $43.40 billion, a price-to-earnings ratio of 32.21, a PEG ratio of 1.42 and a beta of 0.40. The company has a fifty day moving average price of $31.28 and a 200-day moving average price of $29.54.

Keurig Dr Pepper (NASDAQ:KDP - Get Free Report) last announced its earnings results on Thursday, August 6th. The company reported $0.57 EPS for the quarter, beating the consensus estimate of $0.54 by $0.03. The company had revenue of $7.31 billion during the quarter, compared to the consensus estimate of $7.23 billion. Keurig Dr Pepper had a net margin of 7.10% and a return on equity of 10.80%. The firm's revenue for the quarter was up 75.6% on a year-over-year basis. During the same quarter in the prior year, the company posted $0.49 earnings per share. As a group, equities research analysts predict that Keurig Dr Pepper will post 2.3 EPS for the current fiscal year.

Keurig Dr Pepper Company Profile

Keurig Dr Pepper NASDAQ: KDP is a North American beverage company formed in July 2018 through the combination of Keurig Green Mountain and Dr Pepper Snapple Group. The company designs, manufactures, markets and distributes a wide range of hot and cold beverages and related equipment, combining Keurig's single‑serve coffee systems with a large portfolio of carbonated and noncarbonated drink brands. It operates a network of manufacturing, packaging and distribution facilities to supply retail, foodservice and e-commerce channels across its served markets.

The company's product mix includes single‑serve coffee brewers and coffee pods under the Keurig brand as well as a broad assortment of branded beverages.

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