Keurig Dr Pepper Inc: Waiting for the Stock to "Bloom Pop"? Separation Ahead Should Unlock SOTP Value; Model Update Post 2Q26

研报英文原文证据摘录

J P M O R G A N

North America Equity Research

07 August 2026

Keurig Dr Pepper Inc

Waiting for the Stock to “Bloom Pop”? Separation

Ahead Should Unlock SOTP Value; Model Update Post

2Q26

Overweight

KDP, KDP US

Price (06 Aug 26):$30.37

Price Target (Dec-27):$38.00

We are updating our Keurig Dr Pepper (KDP, OW) model following 2Q26 earnings

results, conference call, and follow-up virtual meeting with VP, IR Chethan

Mallela. While KDP beat and reiterated guidance this morning (link to our first take

note), the cautionary commentary on the call regarding the weakness in the coffee

pods (on the Keurig side, while JDEP positively surprised) and planned

reinvestments in consumer value ended up offsetting the strength in the cold

business. KDP shares slightly underperformed the staples sector, closing down 1.2% (vs. S5CONS -0.1%). However, we continue to remain positive into 2027,

through a combination of: 1) strong USRB growth, in particular Dr Pepper Zero

Sugar, energy portfolio (Bloom & GHOST continue to gain share – total energy

portfolio now surpassing 9% share in the U.S.), and other partner brands; 2)

reiterated guidance (i.e., provides more cushion given the consumer environment

and integration of JDEP); 3) the upcoming separation (early 2027) should be a

catalyst to bridge the gap in valuation as SOTP shows depressed valuation for the

coffee business (see sensitivity table inside). We have been receiving more

inbounds on KDP of late and believe investors will begin to revisit the name as the

company executes on the integration work and the separation timeline approaches.

Beverage, Household & Personal

Care Products

Quarterly Forecasts (FYE Dec)

Summary of Estimate Changes; Dec-27 Target Price Remains $38. We

now model for 2026 sales +58.9% YOY to $26.4B (including standalone KDP

constant-currency +6.2%) vs. prior estimate +58.6% YOY to $26.3B

(including standalone KDP constant-currency +6.1%). Our 2026 EPS estimate

remains $2.29, with the growth rate ticking up +10 bps to +11.6% YOY (of the

~$0.04 beat in 2Q26, we believe $0.01-$0.02 was timing related and that KDP

could reinvest the rest). Our Dec-27 target price remains $38 based on 17.4x

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