Keurig Dr Pepper Inc. KDP
KDP remains a hold after FY2025 results showed strong top-line momentum—revenue grew 8.2% to $16.6B and EPS recovered 45.7% to $1.53—but gross margin compressed to 54.2% and free cash flow declined to $1.5B from $1.66B, signaling growth is coming at a cost. The stock trades at a 45% PE premium (32.4x vs peer median 22.3x) and 54% EV/EBITDA premium (21.1x vs 13.7x) as of the latest data, which is difficult to justify with deteriorating FCF and $16.1B in total debt.
Technicals have improved with price above both the 50-day ($31.18) and 200-day ($29.00) moving averages and a positive MACD histogram, while the smart-money score rose to 0.13 as of the quarter ended 2026-06-30 from 0.06 prior, but the JDE Peet's integration needs to demonstrably expand margins and FCF before an upgrade is warranted.
What could go wrong
- Coffee cost pressure. Raw coffee costs remain historically elevated per Barron's (Aug 27, 2026), pressuring the Coffee Systems segment which is KDP's largest revenue driver.
- Valuation premium. KDP trades at 32.4x PE and 21.1x EV/EBITDA, a 45% and 54% premium to peer medians respectively, leaving little room for execution missteps.
- FCF deterioration. Free cash flow fell to $1.5B in FY2025 from $1.66B in FY2024 despite revenue growth of 8.2%, compressing FCF margin to 9.1% from 10.8%.
- Leverage overhang. Total debt stands at $16.1B as of FY2025 against stockholders' equity of $25.5B, limiting financial flexibility for further M&A or buybacks.
What would change my mind
Where this comes from: FMP FY2025 fundamentals + derived_metrics · derived_metrics FY2025 eps_growth_yoy + FMP FY2025 eps_diluted · derived_metrics FY2025 gross_margin · FMP FY2025 vs FY2024 free_cash_flow. Orin's read on KDP; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All KDP filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Fmr | $5.6B | 0.2% of fund |
| Capital World Investors | $3.9B | 0.5% of fund |
| Harris Associates L P | $3.0B | 4.0% of fund |
| Vanguard Capital Management | $2.8B | 0.1% of fund |
| State Street | $2.1B | 0.1% of fund |
| Vanguard Portfolio Management | $2.1B | 0.1% of fund |
82 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 184 Form 4 filings, net −$45.5M. Of the 50 on hand, 1 was an open-market purchase and 3 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about KDP
Orin answers questions about KDP from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 31.9× | 24.3× | 38.3× |
| EV/EBITDA | 21.0× | 16.2× | — |
| P/S | 2.15× | 3.15× | — |
| P/B | 1.7× | 1.8× | — |
Its P/E sits 80th percentile of its own last 5 years (+0.99σ from its own mean).
12.6%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $1.5B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$38
$30 – $42 · +18% against today's price
- 18 buy or overweight
- 11 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| KDPKeurig Dr Pepper Inc. | $43B | 31.9× | 21.0× | 49.4% | 7.1% | 6% |
| ELThe Estée Lauder Companies Inc. | $36B | 197.7× | 48.8× | 75.5% | 1.2% | 5% |
| HSYThe Hershey Company | $34B | 22.8× | 14.9× | 38.1% | 12.2% | 32% |
| KMBKimberly-Clark Corporation | $32B | 16.6× | 12.4× | 36.7% | 11.8% | 123% |
| KRThe Kroger Co. | $35B | 30.8× | 10.8× | 23.1% | 0.7% | 17% |
| KVUEKenvue Inc. | $34B | 20.3× | 13.0× | 58.2% | 10.8% | 16% |
| SYYSysco Corporation | $37B | 21.0× | 13.1× | 18.5% | 2.1% | 75% |
| TGTTarget Corporation | $71B | 16.1× | 9.9× | 29.3% | 4.1% | 27% |
The median is of the 7 peers listed above and nothing else — check it against the column. This company trades 52.0% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $54 | $32.19 · +68% | 2026-06-10 |
| Levered DCF | $35 | $32.19 · +8% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.