Beverage company Keurig Dr Pepper Inc. (KDP) recently announced that its Board of Directors has authorized a new share repurchase program of up to $4 billion of the company’s outstanding common stock.
Following the news, shares of the company declined 2.8% to close at $33.20 on Friday.
The repurchase program will reflect about 8% of the company’s outstanding stock on the closing price of September 29, 2021. The program will be effective for four years — from January 1, 2022 to December 31, 2025. (See Keurig Dr Pepper stock chart on TipRanks)
The company will carry out the purchases at the discretion of the management through open market purchases, privately negotiated transactions, block trades or other structured share repurchase programs.
Last month, Deutsche Bank analyst Stephen Powers assigned a Hold rating to the stock. The analyst, however, raised the price target from $35 to $36, which implies upside potential of 8.4% from current levels.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 4 Buys and 2 Holds. The average Keurig Dr Pepper price target of $40 implies that the stock has upside potential of 20.5% from current levels.
Keurig Dr Pepper scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 20% over the past year.