Keurig Dr Pepper Inc. (KDP), with a market cap of $43.5 billion, is a leading beverage company known for its diverse portfolio of coffee, soft drink, and bottled water brands. Headquartered in Burlington, Massachusetts, KDP operates in North America and continues to adapt to shifting consumer preferences, with an increasing emphasis on healthier and lower-sugar beverage options.
KDP has underperformed the broader market over the last year. The stock has gained marginally over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 22.7%. Also, in 2025, the stock is down marginally compared to SPX’s 2.7% rise on a YTD basis.
Zooming in further, KDP has underperformed the Invesco Food & Beverage ETF (PBJ), which has edged up 5.5% over the past year.
Keurig Dr Pepper has lagged behind the broader market over the past year due to a decline in overall volume and product mix amid weaker consumer spending. Increased debt from recent mergers, acquisitions, and share buybacks have also raised investor concerns.
On Oct. 24, shares of KDP dipped more than 4% after the company reported weaker-than-expected revenue in its third-quarter earnings report. The decline was largely driven by a 3.6% fall in U.S. coffee sales to $976 million, reflecting lower K-Cup pod prices and reduced demand.
Ahead of the release of its FY2024 results next month, 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 17 analysts covering KDP stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” and seven “Holds.”
This configuration is slightly more bullish than two months ago, with eight suggesting a “Strong Buy.”
On Jan. 17, Barclays PLC (BCS) reduced its price target for Keurig Dr Pepper to $36 from $39, while maintaining an “Overweight” rating on the stock. The analyst noted, "It feels like there aren't many places to hide in Staples these days," reflecting the challenging environment for the sector.
The mean price target of $37.44 represents a 16.6% premium to KDP’s current price levels. The Street-high price target of $42 suggests an upside potential of 30.8%.
