GICS Sector : Consumer Defensive
Keurig Dr Pepper Inc.operates as a beverage company in the United States and internationally.It operates through Coffee Systems, Packaged Beverages, Beverage Concentrates, and Latin America Beverages segments.
Keurig Dr Pepper Inc. delivered a robust financial performance in 2025, with net sales increasing 8.6% to a significant figure, operating income rising 4.9%, and EPS growing 7.3% on a constant currency basis to $2.43, with Q4 EPS coming in at $0.60, slightly above estimates of $0.589. The company's US refreshment beverages segment demonstrated a strong performance, growing net sales 11.5%, driven by volume mix and net pricing, while segment operating income increased 8.7%. In contrast, the US coffee segment faced challenges, with net sales growing 3.9% but segment operating income declining 8.8% due to cost inflation and volume mix decline.
Publication Date: Feb -25
The company's international business also showed promising growth, with net sales increasing 16% in constant currency, driven by net price realization and volume mix. The US refreshment beverages segment is expected to continue its strong performance in 2026, with the company planning to drive innovation and growth. As Anthony DiSalvestro, the new CFO, expressed enthusiasm for the company's direction and potential, highlighting the unique value creation opportunity presented by the JDE Peet's acquisition.
Keurig Dr Pepper Inc. expects low double-digit EPS growth in 2026, driven by the JDE Peet's acquisition, which is expected to contribute 6-7 percentage points to EPS growth. The company has provided guidance for Q1 EPS in the range of $0.36-0.37 and expects EPS growth to be positive in Q2 and accelerate further in the second half. The company's free cash flow is expected to increase to approximately $2 billion in 2026, with a refined financing plan in place for the JDE Peet's acquisition.
With a current P/E Ratio of 20.27, P/B Ratio of 1.65, and EV/EBITDA of 16.02, the market appears to have priced in a significant level of growth for Keurig Dr Pepper Inc. The company's ROE of 8.29% and ROIC of 5.5% indicate a reasonable return on equity and invested capital. As the company navigates the integration of JDE Peet's and the separation into two pure-play companies, investors will be watching closely to see if the company can deliver on its growth promises.
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Mar -13
Capital International Investors Lowers Stock Position in Keurig Dr Pepper, Inc $KDP
Mar -13
Capital Group Private Client Services Inc. Cuts Stock Position in Keurig Dr Pepper, Inc $KDP
Mar -11
Barrow Hanley Mewhinney & Strauss LLC Increases Stock Holdings in Keurig Dr Pepper, Inc $KDP
Mar -11
Cresset Asset Management LLC Lowers Stock Holdings in Keurig Dr Pepper, Inc $KDP
Mar -11
Keurig Dr Pepper, Inc $KDP Position Trimmed by Clarkston Capital Partners LLC
Mar -09
Keurig Dr Pepper, Inc $KDP Stock Position Increased by Barclays PLC
Mar -08
Chapman Financial Group LLC Invests $487,000 in Keurig Dr Pepper, Inc $KDP
Mar -07
The U.S. Refreshment Beverages segment growth of 4.2% for Keurig Dr Pepper Inc. is driven by increased consumer demand for convenient and sustainable beverage options, strong performance of flagship brands such as Dr Pepper and Canada Dry, and successful product innovations and packaging redesigns that appeal to health-conscious consumers.
Keurig Dr Pepper Inc.'s international segment growth of 5.1% is driven by increased demand for beverage products, expansion into new markets, and strategic partnerships. The company's diversified portfolio, including brands like Keurig and Dr Pepper, contributes to its growth momentum. Additionally, investments in e-commerce and digital marketing enhance its global reach and consumer engagement.
The U.S. Coffee segment from Keurig Dr Pepper Inc. is driven by growth in single-serve coffee sales, increased consumer demand for convenience and sustainability, and expansion of the Keurig brand through innovative products and partnerships, resulting in a 3.5% growth rate.
Single-serve coffee makers and brewers that use K-Cup pods to provide a convenient and customizable coffee experience
Hot and iced tea, hot chocolate, and other specialty beverages available in K-Cup pods
At-home water filtration systems that provide clean and fresh-tasting water
A variety of flavored sodas, juices, and sparkling waters from brands like Dr Pepper, 7 Up, and Snapple
Flavor shots and creamers that can be used to customize coffee and other beverages
Commercial coffee makers and brewers designed for high-volume use in offices and workplaces
Keurig Dr Pepper Inc. faces moderate threat from substitutes, as consumers have various options for coffee and beverage products. However, the company's strong brand portfolio and innovative products help mitigate this threat.
Keurig Dr Pepper Inc. has a large and diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are widely available, making it difficult for customers to negotiate prices.
Keurig Dr Pepper Inc. relies on a few large suppliers for its coffee beans and other raw materials. While the company has some bargaining power due to its size, suppliers may still exert some pressure on prices and supply terms.
The beverage industry has high barriers to entry, including significant capital requirements and established distribution networks. This makes it difficult for new entrants to compete with Keurig Dr Pepper Inc.'s scale and brand recognition.
The beverage industry is highly competitive, with many established players competing for market share. Keurig Dr Pepper Inc. faces intense rivalry from companies like PepsiCo, The Coca-Cola Company, and Nestle, which can lead to pricing pressure and advertising wars.
| Value | |
|---|---|
| Debt Weight | 36.60% |
| Debt Cost | 4.23% |
| Equity Weight | 63.40% |
| Equity Cost | 7.02% |
| WACC | 6.00% |
| Leverage | 57.73% |
Value: 6.8
Growth: 5.8
Quality: 6.5
Yield: 10.0
Momentum: 7.0
Volatility: 9.7
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Volatility: 8.3
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