Keurig Dr Pepper (KDP – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Bryan Spillane from Bank of America Securities reiterated a Buy rating on the stock and has a $41.00 price target.
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Bryan Spillane has given his Buy rating due to a combination of factors, despite some challenges in Keurig Dr Pepper’s coffee segment. The company has been facing rising green coffee costs, which have reached their highest levels since 1977, impacting sales and earnings expectations for the coffee division. However, Spillane still sees value in KDP’s overall business, highlighting its ability to maintain relative price gaps historically and the resilience of caffeine consumption habits.
Despite adjustments in EPS estimates for FY25 and FY26, Spillane maintains a positive outlook on KDP’s longer-term potential. He notes that the current price objective of $41.00 is based on a 20.5 times FY26 earnings target, which he views as justified by the overall strength and evolution of KDP’s product portfolio. This valuation represents a slight discount to beverage industry peers, which Spillane believes underscores the attractive opportunities within KDP’s diverse product offerings, offsetting the current pressures in the coffee segment.