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Keurig Dr Pepper Inc. KDP is scheduled to release first-quarter 2025 results on April 24, before market open. The company is expected to register top-line growth when it reports the quarterly results. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.56 billion, indicating a 2.8% rise from the year-ago period’s number.
The consensus estimate for KDP’s first-quarter earnings has remained unchanged in the past 30 days at 38 cents per share. The consensus mark for earnings per share remains flat on a year-over-year basis.
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In the last reported quarter, the company delivered an earnings surprise of 1.8%. KDP has registered an earnings surprise of 3.4%, on average, in the trailing four quarters.
Key Factors to Note Ahead of KDP’s Q1 Results
Continued strength in brands and pricing actions have been bolstering the company’s perdormance. Its expansion initiatives and efforts to bring innovation to its products are acting as tailwinds. Sturdy momentum in the Refreshment Beverages segment has been contributing to its overall results. Contribution from the GHOST acquisition is likely to aid results.
The Refreshment Beverages segment has been benefiting from innovations, effective in-market execution, growth in CSDs and expansion in energy and sports hydration. The International unit is also performing well. KDP is focused on reinforcing Electrolit’s distribution and improving away-from-home coffee, which are likely to drive results.
Such traits, along with KDP’s consumer-focused innovation model, supported by comprehensive scorecards tracking awareness, household penetration and loyalty, are expected to have driven continued market share gains in the to-be-reported quarter. The Zacks Consensus Estimate for Refreshment Beverages unit sales is pegged at $2.2 billion, up 4.8% year over year.
Although the aforesaid positives are likely to aid the quarterly results, Keurig Dr Pepper has been witnessing inflationary pressures and elevated selling, general and administrative (SG&A) costs, including increased marketing investments.
The company has also been grappling with a sluggish Coffee segment for a while now. Lower volumes, unfavorable net price realization and declines in Brewer shipments have been weighing on the segment’s performance. The Zacks Consensus Estimate for the Coffee unit sales is pegged at $885 million, down 2.9% year over year.
Valuation Picture
From a valuation perspective, Keurig Dr Pepper stock is trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 17.09x, which is below the five-year high of 23.33x and the Beverages - Soft Drinks industry’s average of 19.04x, the stock offers compelling value for investors seeking exposure to the sector.
The recent market movements show that KDP’s shares have risen 12.7% in the past three months compared with the industry's growth of 11.9%.