Keurig Dr Pepper

(KDP:NASDAQ)  $34.40

Loss to date: 0.6%

We flagged the attractions of Keurig Dr Pepper (KDP:NASDAQ) at $34.60 on 13 June 2024, highlighting the North American beverages play’s diverse brand portfolio – including the iconic, purplish-red canned Dr Pepper – pricing power and cash generation.

Shares also highlighted the drinks group’s ‘palate-pleasing’ growth story under new CEO Tim Cofer, an experienced consumer packaged goods executive with a track record of driving growth, leading transformations and creating shareholder value.

WHAT HAS HAPPENED SINCE WE SAID TO BUY?

Admittedly, the shares are pretty much flat on our entry price, but given the recent tariffs-induced sell-off in global equity markets, that demonstrates Keurig Dr Pepper is performing its role as a defensive portfolio pick. At the time of writing, the stock is up 7.1% in a tumultuous 2025-to-date, outperforming the declines seen in the wider US market.

On 24 April, the Snapple, Canada Dry and Green Mountain brands owner delivered a first-quarter earnings beat with organic growth exceeding expectations and the recently acquired GHOST energy drinks brand delivering a stronger-than-expected contribution. Keurig Dr Pepper also reiterated full-year guidance for mid-single-digit sales growth and earnings per share (EPS) growth in a high-single-digit range.

Jefferies described the robust outlook, which incorporated pressure from tariffs and consumer uncertainty, as ‘a win when others are revising lower’.

WHAT SHOULD INVESTORS DO NOW?

Though the stock price has yet to fizz higher, investors should continue to buy Keurig Dr Pepper for its earnings resilience and the cash generation which will support further dividend increases and share buybacks. 

‘The beverage business is a steady compounder with exposure to faster-growing categories via partnerships,’ enthuses Jefferies, which sees potential for a strong summer ahead given the momentum behind the new Dr Pepper Blackberry drink and the continued distribution roll-out of GHOST. ‘Coffee is a struggle but should be fine long term. International has momentum, contributing at an accelerated rate.’

‹ Previous2025-05-01Next ›