Keurig Dr Pepper upgraded to Buy from Neutral at Citi

Citi upgraded Keurig Dr Pepper to Buy from Neutral with a price target of $43, up from $36. The firm sees volume improvement in U.S. coffee, which represents 26% of the company’s sales but the largest driver of the stock’s multiple, in the second half of 2024 supported by easier comparisons, the recent improvement in scanner data, new brands contributions, and potential upside from the recently launched K Brew + Chill. Citi also has more visibility on U.S. refreshment beverage growth, which is 60% of Keurig’s sales, post its analysis of scanner data. Improvement in coffee volumes and acceleration in refreshment beverages should give investors more comfort in Keurig Dr Pepper’s return to consistent growth, the analyst tells investors in a research note.