Keurig Dr Pepper, the Consumer Defensive sector company, was revisited by a Wall Street analyst yesterday. Analyst Filippo Falorni from Citi maintained a Buy rating on the stock and has a $37.00 price target.
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Filippo Falorni has given his Buy rating due to a combination of factors surrounding Keurig Dr Pepper’s strategic moves and growth potential. The acquisition of JDE Peet’s and the subsequent plan to separate into two distinct public beverage companies are seen as pivotal steps. This transaction is expected to generate significant cost synergies, estimated at $400 million within three years, by combining KDP’s single-serve coffee strength in North America with JDEP’s global coffee brand portfolio.
Furthermore, the involvement of activist investor Starboard Value, which has built a stake in KDP, adds another layer of confidence. Although Starboard cannot halt the deal due to the absence of a shareholder vote, their discussions with KDP have been centered on enhancing execution and rebuilding investor trust. The upcoming investor day is anticipated to provide more insights into the JDEP deal, further solidifying the positive outlook on KDP’s stock.
Falorni covers the Consumer Defensive sector, focusing on stocks such as Constellation Brands, Molson Coors, and Newell Brands. According to TipRanks, Falorni has an average return of -2.0% and a 50.00% success rate on recommended stocks.
In another report released on October 8, Bank of America Securities also maintained a Buy rating on the stock with a $33.00 price target.