Reviewing The Case For Keurig Dr Pepper Inc. (KDP) Going Higher


Capital Research & Management Co.. recently announced the acquisition of new stake in Keurig Dr Pepper Inc. (NYSE:KDP). The institutional investor has increased its shareholding in the Consumer Defensive company by 10.78% to 54.96 million shares with purchase of 5.35 million shares. This fresh investment now brings its stake to 3.91% valued currently at $1.68 billion. In addition, Capital Research & Management Co.. raised its holdings by 15.19 million to 36.29 million shares. And The Vanguard Group, Inc. has lifted its position by 23.79% or 3.57 million shares – to 18.6 million shares.

With over 4.02 million Keurig Dr Pepper Inc. (KDP) shares trading Tuesday and a closing price of $29.95 on the day, the dollar volume was approximately $120.33 million. The shares have shown a positive weekly performance of 2.22% and its price on 09/01/20 gained nearly 0.40%. Currently, there are 1.41B common shares owned by the public and among those 534.99M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 17 analysts who have offered their price forecasts for KDP have a consensus price objective of $33.94. The analysts have set the share’s price value over the next 12 months at a high of $40.00 and a low of $27.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Keurig Dr Pepper Inc. stock is 2.30 for the next 12 months. The average price target is 10.94% above its last price level and an upside to the estimated low will see the stock lose -10.93% over that period. But an upside of 25.13% will see the stock hit the forecast high price target while mean target price for the stock is $34.50.

Insiders at the company have transacted a total of 47 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 42 of these insider trades were purchases, accounting for 7,919,968 shares. Insider sales of the common stock occurred on 5 occasions, with total insider shares sold totaling 196,732,935 shares.

The top 3 mutual fund holders in Keurig Dr Pepper Inc. are American Funds Investment Company, Washington Mutual Investors Fund, and T Rowe Price Capital Appreciation. American Funds Investment Company owns 28.54 million shares of the company’s stock, all valued at over $873.17 million. The company bought an additional 2.8 million shares recently to bring their total holdings to about 2.03% of the shares outstanding. Washington Mutual Investors Fund bought 8.1 million shares to see its total holdings expand to 27.96 million shares valued at over $855.26 million and representing 1.99% of the shares outstanding. T Rowe Price Capital Appreciation sold -11.42 million shares to bring its total holdings to over 22.82 million shares at a value of $698.14 million. T Rowe Price Capital Appreciation now owns shares totaling to 1.62% of the shares outstanding.

Shares of Keurig Dr Pepper Inc. (NYSE: KDP) opened at $29.92, up $0.09 from a prior closing price of $29.83. However, the script later closed the day at $29.95, up 0.40%. The company’s stock has a 5-day price change of 2.22% and 5.20% over the past three months. KDP shares are trading 3.45% year to date (YTD), with the 12-month market performance up to 12.59% higher. It has a 12-month low price of $18.98 and touched a high of $32.00 over the same period. Currently, 4.02 million shares have been traded, compared to an average intraday trading volume of 3.91 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 0.97%, 1.40%, and 6.87% respectively.

Institutional ownership of Keurig Dr Pepper Inc. (NYSE: KDP) shares accounts for 31.60% of the company’s 1.41B shares outstanding. Mutual fund holders own 6.21%, while other institutional holders and individual stakeholders account for 65.22% and 19.39% respectively.

It has a market capitalization of $41.95B and a beta (3y monthly) value of 0.61. The stock’s trailing 12-month PE ratio is 36.52, while the earnings-per-share (ttm) stands at $0.82. The company has a PEG of 3.23 and a Quick Ratio of 0.20 with the debt-to-equity ratio at 0.64. Price movements for the stock have been influenced by the stock’s volatility, which stands at 1.27% over the week and 1.42% over the month.

Analysts forecast that Keurig Dr Pepper Inc. (KDP) will achieve an EPS of $Keurig Dr Pepper Inc. for the current quarter, $29.96 for the next quarter and $Stocks for Type. The lowest estimate earnings-per-share for the quarter is $Office Depot, Inc. while analysts give the company a high EPS estimate of $Meredith Corporation. Comparatively, EPS for the current quarter was $Fresh Del Monte Produce, Inc. a year ago. Earnings per share for the fiscal year are expected to increase by 66.90%, and 13.73% over the next financial year. EPS should grow at an annualized rate of 11.31% over the next five years, compared to -24.30% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 17 brokerage firm advisors rate Keurig Dr Pepper Inc. (KDP) as a “Moderate Buy” at a consensus score of 2.30. Specifically, 10 Wall Street analysts polled rate the stock as a buy, while 6 of the 17 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the KDP, a number of firms have released research notes about the stock. Morgan Stanley stated their Overweight rating for the stock in a research note on August 26, 2020, with the firm’s price target at $34. Goldman coverage for the Keurig Dr Pepper Inc. (KDP) stock in a research note released on July 09, 2020 offered a Buy rating with a price target of $33. Jefferies was of a view on June 11, 2020 that the stock is Buy, while Evercore ISI gave the stock Outperform rating on June 01, 2020, issuing a price target of $35. Goldman on their part issued Neutral rating on April 01, 2020.


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