Keurig Dr Pepper Inc. (KDP) is set to unveil its fourth-quarter 2023 financial results on February 22 before the market opens. The company is projected to demonstrate growth in both its top and bottom lines during this period.
The Zacks Consensus Estimate for KDP’s fourth-quarter earnings remains steady at 54 cents per share over the past 30 days, indicating an 8% year-over-year increase. Additionally, the consensus mark for quarterly revenues stands at $3.9 billion, reflecting a 2.9% growth from the same period last year.
In the preceding quarter, Keurig Dr Pepper delivered an earnings surprise of 2.1%, with an average earnings surprise of 2.1% in the trailing four quarters.
Key Factors to Observe
Keurig Dr Pepper has benefited from ongoing brand strength, notable pricing actions, robust performance in its cold beverages, and significant market share gains. While recent sales growth has been primarily driven by pricing, the company remains optimistic about achieving sustained organic growth.
The Refreshment Beverage segment, in particular, has been a source of strength for KDP, driven by higher net price realization, volume/mix increases, and successful sales and distribution partnerships. The company’s market share has also expanded significantly in various categories, including CSDs, seltzers, energy drinks, and fruit juices.
On the flip side, Keurig Dr Pepper has faced challenges from rising input costs, increased transportation expenses, and supply chain disruptions. Its Coffee segment has also experienced a slowdown lately, with the Zacks Consensus Estimate indicating a year-over-year revenue decline of 18.7% for the quarter under review.
Insights from the Zacks Model
According to our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) usually increases the likelihood of an earnings beat. However, Keurig Dr Pepper currently has an Earnings ESP of -0.82% and a Zacks Rank #4 (Sell), which does not favor an earnings surprise this time around.
Favorable Stocks in Comparison
Other companies that exhibit a more promising combination for potential earnings beats in the current reporting cycle include Inter Parfums (IPAR), Planet Fitness (PLNT), and Monster Beverage (MNST). Each of these companies has an encouraging Earnings ESP and a favorable Zacks Rank.
Inter Parfums, for instance, is anticipated to report an increase in its fourth-quarter revenues. Similarly, Planet Fitness and Monster Beverage are expected to deliver growth in both their top and bottom lines for the same period.
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