Keurig Dr Pepper price target lowered to $35 from $40 at Piper Sandler

Piper Sandler lowered the firm’s price target on Keurig Dr Pepper (KDP) to $35 from $40 and keeps an Overweight rating on the shares. The firm remains bullish on Keurig Dr Pepper, which has solid USRB top-line momentum in retail channels, though Piper recognizes investors’ concern with its post-acquisition leverage. The firm estimates its JDEP acquisition puts Keurig Dr Pepper’s pro-forma leverage at about 5.2x at the end of 2026, falling by a turn to 4.3x by the end of 2027 behind a 9% free cash flow yield. Near-term, Piper sees about $20M of possible upside to its Q3 Ghost estimate, though Mexico continues to be a headwind.