Company Reports

Keurig Dr Pepper announced that Russ Torres will lead its coffee operating unit and then become CEO of Global Coffee Co. upon the separation of the coffee business from the beverages business, which remains slated for early 2027.

Keurig Dr Pepper completed the $18 billion acquisition of JDE Peets in April 2026, and is now planning to split into two independently operating entities focusing on global coffee and North American soft drinks, respectively, in early 2027.

Keurig Dr Pepper's second-quarter constant-currency organic sales grew 7% on a 10% rise in US refreshment beverages that offset a US coffee decline of 3%. Plans to separate beverages and coffee into pure-play companies in early 2027 remain on track.

On June 23, Keurig Dr Pepper announced the departure of Rafa Oliveira, CEO of its coffee unit and expected future CEO of Global Coffee Co. following the planned separation. Oliveira will leave at the end of July before joining Heineken as CEO in October. A search process has begun for a replacement.

Keurig Dr Pepper completed the $18 billion acquisition of JDE Peets in April 2026, and is now planning to split into two independently operating entities focusing on global coffee and North American soft drinks, respectively.

On an adjusted basis, Keurig Dr Pepper's first-quarter sales grew 8% on a 12% rise in US refreshment beverages, but coffee sales fell 2% as lower volumes offset higher prices. The JDE Peet's deal closed on April 1, with plans to separate beverages and coffee into pure-play companies in 2027.

Keurig Dr Pepper announced it is on track to close the $18 billion acquisition of JDE Peets in April 2026, after which it plans to split into two independently operating entities focusing on global coffee and North American soft drinks, respectively.

Keurig Dr Pepper announced it is on track to close the $18 billion acquisition of JDE Peets in April 2026, and it plans to split into two independently operating entities focusing on global coffee and North American soft drinks, respectively.

Keurig Dr Pepper's fourth-quarter sales grew 11% on a 12% rise in refreshment beverages, but adjusted EPS grew only 2% due to cost pressure and expense deleverage in coffee. Management now expects to close the JDE Peets acquisition in April, one quarter earlier than we expected.

Keurig Dr Pepper's sales and adjusted EPS grew 11% and 6%, respectively, in the third quarter. The firm raised its 2025 sales outlook to high-single-digit (from mid-single-digit) growth and reaffirmed high-single-digit EPS growth.

On Aug. 25, 2025, Keurig Dr Pepper proposed to buy JDE Peet's in an $18 billion all-cash offer and following the scheduled deal closure in 2026, plan to to split into two US-listed entities focusing on global coffee and North American soft drinks, respectively.

On Aug. 25, Keurig Dr Pepper proposed to buy JDE Peet's in an $18 billion all-cash offer, valuing the latter at 10 times adjusted EBITDA. Following deal closure in 2026, it plans to split into two US-listed entities focusing on global coffee and North American soft drinks, respectively.

We expect Keurig Dr Pepper to generate excess investment returns aided by intangible assets and scale benefits in its soft drink portfolio and entrenched retail and brand partner relationships in its coffee business for the next 10 years, and thus award it a narrow economic moat rating.

Keurig Dr Pepper's sales increased 6% in the second quarter, driven by an 11% rise in US refreshment beverages. Operating profits rose only 4%, however, and margins narrowed 40 basis points to 21.6%.

Keurig Dr Pepper grew sales by 5% and adjusted EPS by 11% in the first quarter of 2025 and reaffirmed full-year outlook for sales and adjusted EPS to grow by midsingle digits and high single digits, respectively.

We expect Keurig Dr Pepper to generate excess investment returns aided by intangible assets and scale benefits in its soft drink portfolio and entrenched retail and brand partner relationships in its coffee business for the next 10 years and thus award it a narrow economic moat rating.

Narrow-moat Keurig Dr Pepper posted solid performance in its ready-to-drink business in 2024, but its coffee unit remained in distress from soft at-home coffee trends, price competition, and high bean costs. The firm's 4% overall sales growth met our expectation, while the 8% rise in adjusted EPS outpaced our 4% estimate on cost savings. For 2025, we plan to maintain our forecasts for sales and adjusted EPS to grow 5% and 7%, respectively; both align with management outlook. We expect to raise our $33 fair value estimate by a low-single-digit percentage, rendering the stock as fully valued.

We expect Keurig Dr Pepper to generate excess investment returns aided by intangible assets and scale benefits in its soft drink portfolio and entrenched retail and brand partner relationships in its coffee business for the next 10 years and thus award it a narrow economic moat rating.

Resilient demand for sparkling beverages supported narrow-moat Keurig Dr Pepper’s ready-to-drink beverage performance in the third quarter, but coffee results remained pressured by soft at-home coffee trends, elevated promotions, and high coffee bean costs. Sales and adjusted EPS rose 2% and 6%, respectively. Shares fell 5% on coffee weakness but remain overvalued relative to our $32 fair value estimate. We continue to expect sales and adjusted EPS to rise 4% and 7%, respectively, in 2024 and forecast the firm to post 4% average annual sales growth and 22% average operating margins over the next decade.

We don't plan material changes to our $32 fair value estimate on narrow-moat Keurig Dr Pepper after second-quarter sales and adjusted EPS, led by a strong performance in ready-to-drink beverages, were up 4% and 7%, respectively, even as coffee weakness persists. There is no change to our 2024 forecast for sales and adjusted EPS to grow 4% and 7%, respectively, and our 10-year estimates remain in place for mid-single-digit annual sales growth and operating margins in the low 20s. We view shares as fully valued.