KDP - Embedded Expectations Analysis - 2020 06 02
Keurig Dr Pepper Inc. (KDP:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 25.1x Uniform P/E. At these levels, the market has expectations for profitability to remain at historical peaks, but management may be concerned about growth opportunities, marketing initiatives, and leverageSpecifically, management may lack confidence in their ability to sustain segment growth in their packaged beverage segment, drive margin expansion, and maintain their free cash flow conversion ratio. Additionally, they may be overstating their direct store delivery system capabilities, their growth potential, and the strength of their marketing and innovation. Furthermore, they may lack confidence in their ability to meet their deleverage targets, ensure efficient and effective retail coverage, and improve productivity in their Spartanburg and Allentown facilities. Moreover, they may be exaggerating the success of their Dr. Pepper Dark Berry promotion, the value of their K-Slim brewer features, and the strength of their selling and distribution capabilities
Keurig Dr Pepper is a beverage company with a portfolio of flavored (non-cola) carbonated soft drinks (CSDs), non-carbonated beverages, and is a producer of single serve brewing systems. The company's Coffee Systems segment develops and sells a variety of Keurig brewers, brewer accessories and other coffee-related equipment. The company's Packaged Beverages segment manufactures and distributes packaged beverages of its brands. The company's Beverage Concentrates segment manufactures and sells beverage concentrates. The company's Latin America Beverages segment participates mainly in the carbonated mineral water, flavored CSD, bottled water and vegetable juice categories.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.