Analyst Dara Mohsenian of Morgan Stanley maintained a Buy rating on Keurig Dr Pepper (KDP – Research Report), retaining the price target of $40.00.
Dara Mohsenian has given his Buy rating due to a combination of factors that highlight Keurig Dr Pepper’s strong market position and growth potential. The company is expected to experience a significant inflection in organic sales growth (OSG) compared to its peers, driven by its robust pricing power and gains in the U.S. carbonated soft drinks (CSD) market share. This is in contrast to General Mills, which faces ongoing challenges in OSG and lacks similar pricing power.
Mohsenian anticipates that Keurig Dr Pepper’s valuation premium relative to General Mills will expand as its OSG inflection proves sustainable. The company’s superior volume growth prospects, coupled with its advantageous portfolio and competitive dynamics, are expected to lead to higher earnings per share (EPS) growth. Additionally, Keurig Dr Pepper benefits from a higher gross margin and operating margin structure, which supports its continued pricing power and positions it favorably for long-term growth.
In another report released on April 11, Barclays also maintained a Buy rating on the stock with a $37.00 price target.
Based on the recent corporate insider activity of 38 insiders, corporate insider sentiment is neutral on the stock.