Susquehanna Sticks to Its Buy Rating for Keurig Dr Pepper Inc (KDP)

Susquehanna analyst Pablo Zuanic reiterated a Buy rating on Keurig Dr Pepper Inc (NYSE: KDP) today and set a price target of $30. The company’s shares opened today at $22.33.

Zuanic observed:

“KDP will release proforma quarterly estimates only 1-2 weeks before 3Q results. But based on the KGM 8-Ks and DPS 10Qs filings, we think we have a rough idea of base proforma quarterly numbers for the combined company (shown here). For the most part we have only tweaked our estimates (before we had only published full year numbers, and now show quarterly P&L as well as BS/CF metrics), but did revise down DPS EBIT margins for CY18. The calendar 1H18 results show KGM is mostly running in line with both sales and EBIT guidance. On the other hand, DPS in 1H18 reported sales running 2-3pt ahead of guidance, but EBIT margins were 250-300bp below. In this report we are lowering our Dec’19 price target to $30 vs. $33 before, mainly because we value the two units at % premiums to the consumer staples S5CONS index (25% for DPS) vs. hard multiples before of 25x and 19x, respectively.”

According to, Zuanic is a 4-star analyst with an average return of 5.1% and a 44.7% 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.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Keurig Dr Pepper Inc with a $25.20 average price target.

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The company has a one-year high of $25.25 and a one-year low of $13.40. Currently, Keurig Dr Pepper Inc has an average volume of 3.71M.

Based on the recent corporate insider activity of 128 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of KDP in relation to earlier this year. Most recently, in July 2018, James Baldwin, the CLO of KDP bought 63,754 shares for a total of $4,394,937.

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Keurig Dr Pepper, Inc. manufactures and markets non-alcoholic beverages. The company is headquartered in the Burlington, Massachusetts.

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