Keurig Dr Pepper Set to Release Key Earnings Amid Mixed Performance

With a market cap of $42.3 billion, Keurig Dr Pepper Inc. (KDP) is a prominent name in the beverage industry, known for brands like Dr Pepper, Green Mountain Coffee Roasters, and Snapple. The company operates in the U.S., Canada, and internationally, offering a diverse array of products including soft drinks, coffee, tea, and ready-to-drink beverages, catering to various customers from retailers to hospitality and online services. On Tuesday, Feb. 25, before the market opens, KDP is anticipated to announce its fiscal Q4 earnings.

Analysts Geared Up for Earnings Report

In preparation for its earnings announcement, analysts predict that KDP will report a profit of $0.58 per share. This figure represents a 5.5% increase from $0.55 per share reported in the same quarter last year. Notably, the company has consistently met or exceeded Wall Street’s expectations for earnings over the past four quarters. In Q3, KDP matched the consensus EPS estimate of $0.51.

Future Earnings Projections

Expectations for fiscal 2024 are promising, with analysts estimating an EPS of $1.92, marking a 7.3% rise from $1.79 in fiscal 2023. Looking ahead to fiscal 2025, EPS is anticipated to grow by 6.3% year-over-year to reach $2.04.

Stock Performance Under Scrutiny

Shares of KDP have experienced modest increases over the past year, trailing behind both the S&P 500 Index’s ($SPX) 25.3% rise and the Consumer Staples Select Sector SPDR Fund’s (XLP) 8.8% gain.

Challenges Impacting Company Performance

Keurig Dr Pepper’s stock saw a decline of 4.8% on Oct. 24, primarily due to disappointing Q3 revenue results of $3.9 billion. The company’s revenue decline was influenced by a 3.6% drop in U.S. coffee sales, totaling $976 million, attributed to decreased K-Cup pod prices and demand. While sales in U.S. Refreshment Beverages grew, weak coffee performance and flat international sales of $525 million negatively affected overall results. KDP’s announcement regarding a $990 million acquisition for a 60% stake in GHOST Beverages, along with plans to invest $250 million in realigning GHOST’s distribution to Keurig’s network, raised investor concerns.

Analyst Sentiment Reflects Cautious Optimism

The consensus among analysts regarding Keurig Dr Pepper’s stock is one of cautious optimism, reflected in a “Moderate Buy” rating. Out of 17 analysts, nine recommend “Strong Buy,” one suggests “Moderate Buy,” and seven advise “Hold.” Currently, KDP is trading below the average analyst price target of $37.44. 

On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.