UBS Reiterates Buy on Keurig Dr Pepper Ahead of Earnings

Core Viewpoint - UBS maintains a Buy rating and a $35 price target for Keurig Dr Pepper ahead of the third-quarter results and an investor update regarding the JDE Peet's acquisition and planned separation [1] Group 1: Financial Performance Expectations - UBS anticipates a solid quarter for Keurig Dr Pepper, with U.S. Refreshment Beverages and International segments driving organic growth towards the high end of low single digits, while coffee sales are expected to remain roughly flat sequentially [2] - The guidance for the company remains unchanged, indicating stability in expectations despite the ongoing transaction news [2] Group 2: Market Sentiment and Valuation - The broker notes that investors perceive the near-term catalyst path as unclear without significant updates on the JDE Peet's deal or improvements in at-home coffee sales [3] - Despite the event-driven overhang, UBS believes that the combined enterprise is significantly undervalued, suggesting a favorable risk/reward profile for investors [3]