KDP - Embedded Expectations Analysis - 2021 05 11
Keurig Dr Pepper Inc. (KDP:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 24.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about new product launches, potential acquisitions opportunities, and cost pressuresSpecifically, management may lack confidence in their ability to sustain Keurig manufactured K-cup growth, maintain CORE's top-line and earnings performance, and sustain operating margin improvements. Also, they may have concerns about sustainable sourcing at brewers and increases in cost pressures for 2021. Furthermore, they may lack confidence in their ability to achieve diluted EPS targets and further participate in M&A transactions. Moreover, management may be overstating the potential of their post-consumer recycled packaging, new flavor varieties across their carbonated soft drink (CSD) portfolio, and their Honickman partnership. Finally, they may lack confidence in their ability to maintain their strong free cash flow and high volume/mix performance
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.
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