# Keurig Dr Pepper (KDP) Sector: Beverages and coffee | Field | Value | |---|---| | Price | $37.59 | | Market cap | $51B | | Intrinsic value source | Analysts | | Data as of | 2026-11-11 | | Next earnings | 2027-02-03 (estimate) | Analysts: Bullish Picks: Research only Discount category: Far above intrinsic value ## In short Keurig Dr Pepper's price already includes lower debt after the JDE Peet's purchase and a clean split in two, and only a smooth separation with falling debt can support this price. ## Themes and gap - Themes: High debt (leverage), Weak consumer (weak-consumer), New management (management-change) - Gap type: Can close (closable) - Why: The separation into Beverage Co. and Global Coffee Co., targeted for early 2027, and the Q4 2026 report show whether debt falls and both companies stand alone. ## About Keurig Dr Pepper Inc. (KDP) sells soft drinks and coffee. Its U.S. Refreshment Beverages segment owns brands such as Dr Pepper, Canada Dry, 7UP, A&W, Snapple, Mott's, GHOST and Core Hydration. Its U.S. Coffee segment sells Keurig single-serve brewers and pods. KDP bought JDE Peet's, which owns coffee brands such as Jacobs, L'OR and Peet's, on April 1, 2026. Its KDP International segment sells beverages in Canada, Mexico and other markets. Net sales were $7.34 billion in Q3 2026 and $16.6 billion in 2025, before JDE Peet's. KDP plans to separate into two public companies, Beverage Co. and Global Coffee Co., in early 2027. The shares trade on the Nasdaq. The head offices are in Frisco, Texas, and Burlington, Massachusetts. Tim Cofer is Chief Executive Officer. ## Thesis KDP's price already includes lower debt and a clean split in two, after KDP took on much debt to buy JDE Peet's. U.S. Refreshment Beverages grows fast, with net sales up 10.9% in Q3 2026, but U.S. Coffee has had price cuts, and net debt is 4.1 times pro forma Adjusted EBITDA. For the price to hold, three things must be true. KDP must reach its 2026 guidance of low-double-digit Adjusted EPS growth and the planned cost savings from JDE Peet's. It must reduce debt with free cash flow and asset sales, such as the Chobani stake. And the separation into Beverage Co. and Global Coffee Co., targeted for early 2027, must leave both companies with investment-grade balance sheets. The Q4 2026 report, expected in February 2027, and the separation are the next tests. ## Checkpoints - Nov 3, 2026: Q3 2026 results and 2026 guidance. Status: Passed. Watch: Reaffirmed 2026 guidance passes; a cut fails. Outcome: KDP reaffirmed its 2026 guidance, and Adjusted diluted EPS rose 22.2% to $0.66. - Feb 3, 2027 (estimate): Q4 2026 results and 2027 outlook. Status: Pending. Watch: 2026 Adjusted EPS growth in the low double digits and lower leverage pass; a miss fails. - Q1 2027 (estimate): Separation into Beverage Co. and Global Coffee Co.. Status: Pending. Watch: A separation in early 2027 with investment-grade ratings for both companies passes; a delay or a rating below investment grade fails. ## Balance sheet - Cash: $1.3B - Debt: $29.2B - Net debt: $27.9B - EBITDA, last 12 months: $6.8B - Net debt / EBITDA: 4.1× (high) - Undrawn credit line: $4.3B, to March 2030 - Debt due within 12 months: $7.3B - Ratings: Moody's Baa3 (stable outlook), S&P BBB- (stable outlook) KDP funds its business with senior notes, commercial paper, a term loan and convertible preferred stock. At September 30, 2026, debt principal was $29,235 million: $24,805 million of senior notes, $1,242 million of commercial paper and $3,188 million under the delayed draw term loan. Short-term borrowings and the current portion of long-term debt were $7,270 million. Cash and cash equivalents were $1,290 million. Pro forma Adjusted EBITDA for the last twelve months was $6,822 million, so the management leverage ratio was 4.1 times. The $4,300 million revolving credit facility, which matures in March 2030, was undrawn. KDP also has $4,500 million of convertible preferred stock. Moody's rates KDP Baa3 and S&P BBB-, both with a stable outlook since March 10, 2026. The guarantees by KDP of the JDE Peet's notes and the Maple notes end at the separation. At November 5, 2026, there were 1,360,948,350 shares. The quarterly dividend is $0.23 per share. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/1418135/000141813526000064/ex991-keurigdrpepperreport.htm - https://www.sec.gov/Archives/edgar/data/1418135/000141813526000066/kdp-20260930.htm ## Dividends - Dividend yield: 2.4% (last 12 months, at the current price) - Paid per share, last 12 months: $0.92 (4 payments) - Current annual rate: $0.92 ($0.23 x 4 a year) - Payout ratio: 60% of the earnings of the last fiscal year (the year ended 2025-12-31) - Latest ex-dividend date: 2026-09-28, $0.23 per share - Growth from 2020 to 2025: 8.9% a year - Growth from 2015 to 2025: -7.1% a year Dividends per share by year: 2016: $2.12, 2017: $2.32, 2018: $0.73, 2019: $0.60, 2020: $0.60, 2021: $0.676, 2022: $0.764, 2023: $0.815, 2024: $0.875, 2025: $0.92. One-off payments far above the usual dividend are left out of these numbers. Source: company filings and market data, read on 2026-11-10. ## Recent events - 2026-11-03: KDP reported Q3 2026 results. Net sales rose 70.6% to $7.34 billion with JDE Peet's, and legacy KDP net sales grew 8.6%. Adjusted diluted EPS rose 22.2% to $0.66. KDP reaffirmed its 2026 guidance. - 2026-11-03: Russ Torres joined KDP as Chief Executive Officer of the coffee business. He will lead Global Coffee Co. after the separation, which is targeted for early 2027. - 2026-09-28: KDP completed the sale of its stake in Chobani for $800 million, $400 million in cash and a $400 million note due December 26, 2026, and the sale of its Allentown facilities for $125 million. It uses the proceeds to reduce debt. - 2026-08-06: KDP reported Q2 2026 results. Net sales rose 75.6% to $7.31 billion, and Adjusted diluted EPS was $0.57. KDP reaffirmed its 2026 guidance. - 2026-04-23: KDP reported Q1 2026 results and reaffirmed its 2026 guidance. - 2026-04-01: KDP completed its purchase of JDE Peet's. - 2026-03-26: KDP's subsidiary Maple issued notes of $2.55 billion to fund part of the JDE Peet's purchase. - 2026-02-24: KDP reported 2025 results. Net sales rose 8.2% to $16.6 billion, and Adjusted diluted EPS rose 7.3% to $2.05. - 2026-02-23: KDP increased the convertible preferred equity investment co-led by Apollo and KKR to $4.5 billion, from $3 billion, and no longer considers a partial IPO of Beverage Co. ## Latest news and filings - Last earnings: 2026-11-03 (8-K: https://www.sec.gov/Archives/edgar/data/1418135/000141813526000064/) - Next earnings: 2027-02-03 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-11-09 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | kdp-20260930 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000066/kdp-20260930.htm | | 2026-11-03 | 8-K | Earnings release | | kdp-20261103 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000064/ | | 2026-10-01 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/1418135/000119312526409799/d87955d8k.htm | | 2026-09-28 | 8-K | Other company news | | kdp-20260928 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000060/kdp-20260928.htm | | 2026-09-16 | 8-K | Other company news | | kdp-20260916 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000058/kdp-20260916.htm | | 2026-09-01 | 8-K | Other company news | | kdp-20260828 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000055/kdp-20260828.htm | | 2026-08-12 | 8-K | Change of directors or officers | | kdp-20260810 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000053/kdp-20260810.htm | | 2026-08-10 | 10-Q | Quarterly report for the period ended Jun 30, 2026 | 2026-06-30 | kdp-20260630 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000051/kdp-20260630.htm | | 2026-08-06 | 8-K | Earnings release | | kdp-20260806 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000048/ | | 2026-06-25 | 8-K | Change of directors or officers | | kdp-20260622 | https://www.sec.gov/Archives/edgar/data/1418135/000141813526000045/kdp-20260622.htm | Every filing on SEC EDGAR (CIK 1418135): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001418135&type=&dateb=&owner=include&count=40 ## Risks - High: Debt principal was $29,235 million at September 30, 2026, 4.1 times pro forma Adjusted EBITDA. Moody's and S&P downgraded KDP to Baa3 and BBB-, the lowest investment-grade ratings. A further downgrade would raise borrowing costs. - Medium: The separation into two companies is complex and costly. Delays, extra costs or weak results in one company can lower the total value. - Medium: In U.S. Coffee, net price realization fell 4.2% in Q3 2026. Green coffee costs and competition from private-label pods can lower margins. - Medium: The $4,500 million of convertible preferred stock converts at $37.25 per share, which can add new shares, and it takes part of the earnings. - Low: Mexico's special tax on sweetened drinks (IEPS) increased costs in KDP International. - Low: Tariffs on imported goods can raise costs. KDP has claimed refunds of tariffs that the U.S. Supreme Court invalidated, but more tariffs can follow. ## Links - Page: https://picks.utilarium.app/company/KDP/ - History of changes: https://picks.utilarium.app/company/KDP/history/ - JSON with full history: https://picks.utilarium.app/data/company/KDP.json > Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.