Keurig Dr Pepper stock maintains Buy rating at UBS ahead of Q3 earnings

Investing.com - UBS has reiterated its Buy rating and $35.00 price target on Keurig Dr Pepper (NASDAQ:KDP) ahead of the company’s third-quarter earnings report. The beverage giant, currently valued at $37.79 billion, has demonstrated strong fundamentals with impressive gross profit margins of 54.93%. According to InvestingPro analysis, KDP appears undervalued at current levels.

KDP is scheduled to report its third-quarter results on Monday, October 27, before market open, followed by an investor update regarding the JDEP acquisition and planned separation in New York City later that day.

UBS expects KDP to deliver a solid third quarter, with U.S. Refreshment Beverages and International segments driving organic growth at the high end of low-single digits, while the coffee segment is anticipated to remain approximately flat sequentially.

The firm believes management’s commentary at the investor event will significantly impact market sentiment, though investors may still have questions about the future direction of different business segments. UBS anticipates the company will provide additional details on timing and capital structure.

Despite an unclear catalyst path for KDP through the remainder of the year, UBS maintains that at current price levels, the total enterprise is significantly undervalued, suggesting a favorable risk/reward profile.

In other recent news, Keurig Dr Pepper has announced a regular quarterly cash dividend of $0.23 per share, set to be paid on October 10, 2025, to shareholders of record as of September 26, 2025. The company has also made a significant leadership change by appointing Olivier Lemire as president of its U.S. coffee division, with Patrick Minogue assisting in the transition until September 30, 2025. Meanwhile, several financial firms have adjusted their outlooks on Keurig Dr Pepper. TD Cowen has lowered its price target for the company to $28.00, citing concerns over increased coffee exposure and elevated leverage following a recent acquisition. Barclays has downgraded the company’s stock from Overweight to Equalweight, reducing its price target to $26.00 due to uncertainties surrounding asset reshuffling transactions. Piper Sandler also adjusted its price target to $35.00, while maintaining an Overweight rating, expressing concerns about post-acquisition leverage. These developments highlight ongoing challenges and adjustments within the company.

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