2Q26 Review: JDEP Lift Coming Through

Research evidence excerpt

FICC Research

Credit Research

10 August 2026

Keurig Dr Pepper (KDP)

2Q26 Review: JDEP Lift Coming

Through

Key takeaways: 1) PF mgmt lev=4.4x, on track for 4.1x by YE;

2) US coffee beginning to turn a corner; 3) solid performance

out of JDEP; 4) energy market share reached 9%; 5) $400mn

synergy target reaffirmed; 6) maintain OW and recommend

buying KDP Maple $2036s/2056s and €2035s.

We reaffirm our Overweight rating on KDP, as we still see room for compression on the KDP

Maple side in USD, which would bring those bonds to +10bp versus KDP Beverage, and 20bp

cheap to KHC (in our view, fair value for KDP Beverage is +10bp to KHC). We recommend buying

KDP $ 5.7s of 2036, $ 6.625s of 2056 which trade wide of our fair value. On the EUR curve, we

recommend adding the € 4.728s of 2035 – this bond not only looks cheap in comparison with

the USD bonds (see Figure 1), but also versus comps like JDEP, which should trade flat as the

two are pari,1 and offers a 35bp pick-up to KHC.

In our view, 2Q results helped support the rationale for combining the JDEP and the US Coffee

businesses, with early indications of the split on track for early 2027. Moreover, deleveraging is

also progressing as expected, with management-defined net leverage of 4.4x at quarter-end (as

CP + TL borrowings came down close to $650mn sequentially), with an eye to get this to 4.1x by

YE. This should further shore up investor confidence in the story, driving the aforementioned

compression.

This document is intended for institutional investors and is not subject to all of the

independence and disclosure standards applicable to debt research reports prepared for retail

investors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for its

own account and on a discretionary basis on behalf of certain clients. Such trading interests

may be contrary to the recommendations offered in this report.