Bank of America Securities analyst Peter Galbo maintained a Buy rating on Keurig Dr Pepper yesterday and set a price target of $41.00.
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Peter Galbo has given his Buy rating due to a combination of factors surrounding Keurig Dr Pepper’s strategic moves. The company’s decision to acquire JDE Peet’s and subsequently split into two separate entities is a significant development. This acquisition, valued at approximately $23 billion, is expected to enhance KDP’s market position by expanding its coffee business and creating a standalone cold beverage company.
Despite the initial negative market reaction, which saw a decline in share prices, Galbo believes that the potential for unlocking value in the cold beverage sector is substantial. The planned separation into Global Coffee Co. and Beverage Co. is anticipated to maintain investment-grade credit profiles, which should reassure investors. While the complexity of the merger and spin-off introduces certain risks, the long-term benefits and strategic alignment with industry peers like Coca-Cola could lead to a favorable revaluation of the company’s stock.
In another report released today, Barclays also maintained a Buy rating on the stock with a $39.00 price target.
Based on the recent corporate insider activity of 48 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of KDP in relation to earlier this year.