Keurig Dr Pepper Inc. KDP is currently trading at a notably low price-to-earnings (P/E) multiple, which is below the Zacks Beverages - Soft Drinks industry and broader Consumer Staples averages. KDP's forward 12-month P/E ratio is 16.04X, lower than the industry average of 18.31X and the sector average of 17.39X.

KDP Valuation PictureZacks Investment Research

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The stock is undervalued compared with its industry peers, offering compelling value to investors looking for exposure to the consumer staple sector.

KDP shares have appreciated 5.9% in the last three months, outperforming the Zacks Beverages - Soft Drinks industry’s growth of 1% and the broader Consumer Staples industry’s return of 3.5%.

KDP Stock's Performance In the Past Three MonthsZacks Investment Research

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Factors Driving KDP Stock’s Performance

Keurig’s strong performance in the first quarter of 2025 highlights the effectiveness of its consumer-focused innovation model, which is supported by scorecards that track awareness, household penetration and loyalty. This approach has played a pivotal role in driving market share gains across key categories such as liquid refreshment beverages, K-Cup pods and brewers in major markets including the United States, Mexico and Canada.

The company’s growth reflects a strategic combination of innovation, brand activity and strong commercial execution, underpinned by a continued emphasis on cost efficiency, productivity and disciplined capital management. KDP further strengthened its distribution network with new territory expansion in Tennessee, while its company-owned Direct Store Delivery network in Mexico provided a competitive edge in a market dominated by traditional trade.

Investments in expanding system coverage, increasing selling routes and placing more coolers in Mexico contributed to robust regional growth. Additionally, the company’s solid brand portfolio and effective in-market execution, along with pricing elasticity across most categories, supported a 4.8% year-over-year increase in net sales, or 6.4% on a constant-currency basis, in the first quarter of 2025. This includes a 3.6% rise in volume/mix and a 2.8% benefit from favorable pricing.

Keurig has been building strong momentum in its U.S. Refreshment Beverages segment, driven by sustained volume growth, pricing actions, and strategic brand and partnership initiatives. In the first quarter of 2024, sales in the segment reached $2.32 billion, marking an 11% year-over-year increase, supported by an 8% rise in volume/mix and a 3% increase in net price realization. The growth was underpinned by market share gains across carbonated soft drinks, energy drinks and sports hydration categories.

Notably, solid performance in liquid refreshment beverages was fueled by the strength of brands like Peñafiel and core CSD offerings such as Dr Pepper and Crush. The acquisition of GHOST further bolstered segment results, enhancing the energy drink portfolio and aligning with evolving consumer preferences. The base business remains healthy, supported by the continued success of carbonated soft drinks and key partnerships.

Story Continues

Revised Estimates Signal Strength in KDP Stock

Reflecting the positive sentiment, the Zacks Consensus Estimate for KDP’s 2025 earnings has increased by a penny in the past 30 days.

For 2025, the Zacks Consensus Estimate for KDP’s sales and EPS implies 5.61% and 6.25% year-over-year growth, respectively. The consensus mark for 2025 sales and earnings indicates 4% and 6.9% year-over-year increases, respectively.

Final Words on KDP Stock

Investors should consider Keurig stock, backed by its compelling valuation, bolstered by strong execution across its core categories, with notable growth in liquid refreshment beverages, K-Cup pods and brewers. With continued momentum in its U.S. and Mexico operations, strategic brand partnerships and a robust distribution network, KDP’s undervaluation makes it a smart addition to portfolios. The company currently carries a Zacks Rank #2 (Buy).

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NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average. The Zacks Consensus Estimate for Nomad Foods’ current financial-year earnings per share (EPS) indicates growth of 9.3% from the year-ago number.

United Natural Foods UNFI, which is a distributor of natural, organic and specialty food in the United States, currently carries a Zacks Rank #2.

UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average. The Zacks Consensus Estimate for UNFI’s current financial-year sales and EPS indicates growth of 1.9% and 485.7%, respectively, from the year-ago numbers.

Utz Brands UTZ manufactures salty snacks under popular brands and has a Zacks Rank of 2 at present. UTZ delivered a trailing four-quarter average earnings surprise of 6.9%.

The Zacks Consensus Estimate for UTZ’s current financial-year sales and EPS implies growth of 1.4% and 10.4%, respectively, from the year-ago numbers.

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This article originally published on Zacks Investment Research (zacks.com).

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