Keurig Dr Pepper-KDP Poised to Report Q4 Earnings: Is a Surprise in the Cards?

Core Viewpoint - Keurig Dr Pepper Inc. (KDP) is expected to report a solid performance in its fourth-quarter 2024 results, with anticipated year-over-year increases in both revenues and earnings per share [1][2]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for fourth-quarter revenues is $4.03 billion, reflecting a 4.2% increase from the same quarter last year [2]. - The consensus estimate for quarterly earnings is 57 cents per share, indicating a 3.6% increase year-over-year, although this figure has decreased by one cent in the past 30 days [2]. - KDP has a trailing four-quarter earnings surprise average of 3.4% [2]. Key Growth Drivers - KDP's consumer-focused innovation model is expected to drive market share gains, supported by metrics tracking awareness, household penetration, and loyalty [3]. - The company's strategic focus on innovation, brand activity, and strong commercial execution, along with disciplined capital management, positions it for sustained growth in key categories such as liquid refreshment beverages, K-Cup pods, and brewers [3]. Operational Expansion - Recent asset integration in Arizona and an extended distribution footprint in Tennessee are expected to enhance KDP's operational reach [4]. - The Direct Store Delivery network in Mexico provides a competitive advantage in a market reliant on traditional trade, with ongoing investments showing strong growth trends [4]. Full-Year Guidance - Management has reaffirmed its full-year guidance, expecting mid-single-digit constant-currency net sales growth and high-single-digit adjusted earnings per share growth for 2024 [5]. Segment Performance - The Refreshment Beverages segment is projected to generate$ 2.4 billion in revenues, marking a 4.7% year-over-year increase, driven by strong sales and a favorable product mix [6]. - Growth in carbonated soft drinks (CSDs) is attributed to affordable pricing and strategic marketing efforts [6]. Brand Strength and Marketing - KDP's strong market share momentum is expected to continue, bolstered by successful innovation and brand strength [7]. - Popular products like Dr Pepper's creamy coconut flavor and expanding zero-sugar options are anticipated to gain traction, supported by marketing campaigns [7]. Valuation Perspective - KDP stock is trading at a forward 12-month price-to-earnings ratio of 15.98x, below its five-year high of 23.33x and the industry average of 18.41x, indicating compelling value for investors [9]. - Over the past three months, KDP shares have increased by 1.7%, compared to the industry's growth of 2.3% [10].