Key Stats for Keurig Dr Pepper Stock
- Price Change: +4.23%
- Current Price: $31.03
- Valuation Model Target: $41.00
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What Happened?
Keurig Dr Pepper (KDP) shares gained 4.3% to $31.03 as investors digested a complex fourth-quarter earnings report filled with massive structural changes.
The beverage giant delivered a solid operational performance, growing full-year net sales by nearly 9% (driven by a 4-point contribution from GHOST) and increasing EPS by 7%.
However, the real story is the company’s impending transformation. Management is actively laying the groundwork to acquire JDE Peet’s in early April and subsequently split Keurig Dr. Pepper into two entirely separate, pure-play companies: Beverage Co. and Global Coffee Co.
To execute this split, the company announced a massive, multi-billion-dollar financing overhaul.
CFO Anthony DiSilvestro detailed exactly how the company is funding this transformation, abandoning previous plans for a partial IPO of the beverage business.
DiSilvestro stated verbatim: “Based on strong demand, we have chosen to increase the size of our beverage company convertible preferred equity raise to $4.5 billion versus the previously announced $3 billion. Second, we have finalized and are preparing to close our $4 billion global coffee company pod manufacturing JV.”
While the U.S. Refreshment Beverages segment was the standout performer, delivering double-digit net sales growth, the U.S. Coffee segment struggled.
Coffee operating income declined 8.8% as the company absorbed elevated green coffee inflation and absorbed a 16.8% decline in brewer shipments due to aggressive retailer inventory adjustments.
See analysts’ growth forecasts and price targets for Keurig Dr Pepper stock (It’s free!) >>>
Is Keurig Dr Pepper Undervalued Today?
The TIKR Model indicates that the market is currently heavily discounting the short-term margin pressure in the coffee segment while ignoring the massive long-term cash generation of the combined entities.
The model projects a target price of $41.00, representing a highly attractive 32.1% potential total return from current levels.
While the coffee segment absorbs temporary cyclical headwinds, the company’s core refreshment brands are aggressively capturing market share.
KDP expanded its energy drink portfolio, anchored by GHOST, C4, Bloom, and Black Rifle, and outperformed the entire category, increasing its market share by nearly 1.5 points.
This top-line momentum is translating into structural profitability. According to the TIKR Historical Breakdown, KDP maintained a highly resilient Net Income Margin of 17.1% over both the 1-year and 5-year periods, far outpacing its 10-year average of 12.5%.
CEO Tim Cofer explained exactly why the company’s flexible strategy in these emerging, high-growth categories separates KDP from legacy beverage peers.
Cofer stated verbatim: “We intend to deploy our flexible build, buy partner model to expand into additional white space areas over time, including through capital-light structures, and this should further enhance our portfolio’s growth potential.”
Read the full Keurig Dr Pepper Transcript on TIKR to see the revenue breakdown >>>
Valuation Deep Dive
The TIKR Advanced Valuation Model identifies Keurig Dr. Pepper as a cash-generating powerhouse that is actively engineering a massive value unlock through its upcoming corporate split.
- Target Price: $41.00
- Current Price: $31.03
- Annualized Return (IRR): 5.9%
The JDE Peet’s Accretion: While the sheer size of the JDE Peet’s acquisition is daunting, the financial math is highly compelling. Management expects the acquisition to add roughly $8.5 billion to $8.7 billion in net sales and drive a massive 6 to 7 percentage point EPS contribution in 2026 alone. By combining global coffee operations before spinning them off, KDP is targeting $400 million in 3-year synergies.
A Free Cash Flow Machine: The company’s ability to execute this complex transaction rests entirely on its cash generation. KDP produced $1.5 billion in free cash flow in 2025 and expects that figure to surge to $2.0 billion in 2026 for the stand-alone business. Once JDE Peet’s (which generated over €1.1 billion in FCF itself) is fully integrated, the combined entity will possess the financial firepower necessary to swiftly deleverage the balance sheet post-close.
Conclusion: A highly complex, transformational period is masking the underlying cash generation of a premier beverage portfolio. Keurig Dr Pepper offers a 32.1% projected total return potential. The path to the $41.00 target is supported by aggressive market share capture in energy drinks, massive EPS accretion from the JDE Peet’s deal, and a surging free cash flow profile.
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How Much Upside Does Keurig Dr Pepper Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
