Market Overview

Morgan Stanley Has A Caffeine Buzz For Keurig Dr Pepper

Morgan Stanley Has A Caffeine Buzz For Keurig Dr Pepper

Keurig Dr Pepper Inc (NYSE: KDP) has strong exposure to the at-home coffee segment that will prove to be a winner even in the post-COVID world, according to Morgan Stanley.

The Keurig Dr Pepper Analyst: Dara Mohsenian upgraded Keurig Dr Pepper from Equal-Weight to Overweight with a price target lifted from $32 to $34.

The Keurig Dr Pepper Thesis: Keurig, the coffee portion of the business, accounts for around 40% of the company's total sales and 45% of total profit, Mohsenian wrote in the note. The unit has seen a near-term boost as consumers were left with little option but to get their caffeine fixes at home.

But the stock has underperformed its peers on a year-to-date basis as its at-home coffee gains are partially offset by weakness in away-from-home beverages.

However, Mohsenian said the coffee business could prove to be sticky in a post-COVID reality due to higher unemployment rates, more people working from home, and consumers feeling a need to continue using the coffee maker after spending $60 to $180 on the brewer. At the same time, the legacy cold beverage business will rebound as dining out trends improve.

Also, Keurig Dr Pepper's stock float is now above the S&P 500 threshold and it's a likely candidate to be included in the index.

KDP Price Action: Shares of Keurig Dr Pepper were trading higher by 2% at $29.88.

Related Links:

Recap: Keurig Dr Pepper Q2 Earnings

Keurig Dr Pepper Could Outperform Even In A Recession, Goldman Sachs Says In Upgrade

Latest Ratings for KDP

Aug 2020Morgan StanleyUpgradesEqual-WeightOverweight
Jul 2020Morgan StanleyMaintainsEqual-Weight
Jul 2020JefferiesMaintainsBuy

View More Analyst Ratings for KDP
View the Latest Analyst Ratings


Related Articles (KDP)

View Comments and Join the Discussion!

Posted-In: beverages coffee Coronavirus Dara MohsenianAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

LUKeyBancInitiates Coverage On
NEWRKeyBancInitiates Coverage On
DDOGKeyBancInitiates Coverage On
AYXKeyBancInitiates Coverage On
SPLKKeyBancInitiates Coverage On
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at