Susquehanna analyst Pablo Zuanic maintained a Hold rating on Dr Pepper (NYSE: DPS) today and set a price target of $129. The company’s shares closed yesterday at $120.63, close to its 52-week high of $126.65.
Zuanic noted:
“We estimate YTD the new KDP is running ahead of sales guidance, owing to a recovery in branded K-cups and ongoing forays into PL. We also think DPS (60% of the new KDP sales) is about 1pt ahead of guidance. Re K-cups, CY18 guidance called for flat $ sales growth (vol +MSD), but the scanner data shows $ sales for the branded component (both owned and partnered) are up 3% (vol +6%) and PL as a category is growing sales at about +11% (KGM is gaining share in PL, where we estimate it now has 10-20% segment share). So, we see upside to our 2019 $1.26 EPS for the new KDP (see appendix), with the number closer to $1.35-1.40 based on underlying trends. Depending on tax rate assumptions for the $103.75 special dividend (we take ~5%, as bulk of payment will be treated as return of capital), the stock now at $120.63 (minus the coming 58c qtr div) would imply a 14-15x for the KDP stub.”
According to TipRanks.com, Zuanic is a 4-star analyst with an average return of 4.3% and a 53.5% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners, Constellation Brands Inc, and Anheuser-Busch Inbev Sa.
Dr Pepper has an analyst consensus of Moderate Buy, with a price target consensus of $127.25.
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The company has a one-year high of $126.65 and a one-year low of $83.23. Currently, Dr Pepper has an average volume of 1.1M.
Based on the recent corporate insider activity of 77 insiders, corporate insider sentiment is negative on the stock.
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Dr Pepper Snapple Group, Inc. engages in the manufacturing, marketing and distribution of non-alcoholic beverages. It operates through the following segments: Beverage Concentrates, Packaged Beverages, and Latin America Beverages.
