Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

<ul>
<li>Keurig Dr Pepper share price has been under pressure over the recent months due to higher than expected drop in profitability.</li>
<li>Beverage segments, however, continue to perform well and would most likely offset weaknesses in coffee.</li>
<li>Investors should not expect a quick rebound in the company's free cash flow.</li>
</ul>


Keurig Dr Pepper share price has been under pressure over the recent months due to higher than expected drop in profitability.
Beverage segments, however, continue to perform well and would most likely offset weaknesses in coffee.
Investors should not expect a quick rebound in the company's free cash flow.


Keurig Dr Pepper: The Recent Share Price Drop Might Not Last For Long

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Keurig Dr Pepper delivered a decent set of results for the past quarter with its reported earnings being aligned with the analyst expectations while the revenue growth was above par.</li><li>Home coffee volume growth sees a deceleration.</li><li>We give Keurig Dr Pepper a 'Hold' rating with a revised target price.</li></ul>

Keurig Dr Pepper delivered a decent set of results for the past quarter with its reported earnings being aligned with the analyst expectations while the revenue growth was above par.Home coffee volume growth sees a deceleration.We give Keurig Dr Pepper a 'Hold' rating with a revised target price.

<ul><li>Keurig Dr Pepper’s quarterly results were a major disappointment as the company failed to meet market expectations in terms of revennues given the highly volatile macro environment.</li><li>The company barely managed to meet earnings expectations and a key driver was the growth in cold beverages.</li><li>We provide the stock of Keurig Dr Pepper with a ‘Hold’ rating with a revision in the target price.</li></ul>

Keurig Dr Pepper’s quarterly results were a major disappointment as the company failed to meet market expectations in terms of revennues given the highly volatile macro environment.The company barely managed to meet earnings expectations and a key driver was the growth in cold beverages.We provide the stock of Keurig Dr Pepper with a ‘Hold’ rating with a revision in the target price.

Keurig Dr Pepper: Partnership With Red Bull & Other Drivers

<ul><li>Keurig Dr Pepper continues to battle inflationary challenges with price actions but its brand strength has been its biggest asset in the current environment.</li><li>With the higher prices, the company was able to surpass Wall Street expectations in terms of both, revenues as well as earnings.</li><li>Keurig Dr Pepper is on track to achieve 1 million linked households in the coming years thanks to its ongoing smart technology development, which is opening up new platforms like smart car delivery for pods.</li></ul>

Keurig Dr Pepper continues to battle inflationary challenges with price actions but its brand strength has been its biggest asset in the current environment.With the higher prices, the company was able to surpass Wall Street expectations in terms of both, revenues as well as earnings.Keurig Dr Pepper is on track to achieve 1 million linked households in the coming years thanks to its ongoing smart technology development, which is opening up new platforms like smart car delivery for pods.

Keurig Dr Pepper Inc.: Atypique Distribution Rights & Other Developments

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>There are quite a few changes for stocks across the <a href="https://www.smartkarma.com/entities/s-p-500" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 (SPX INDEX)</a>, MidCap 400 Index and SmallCap 600 Index that will result in a one-way trade of US$30bn.</li>
<li>There are adds/deletes that have over 5 days of ADV to trade from passive funds, plus many stocks that have over +/-1 day of ADV from other changes.</li>
<li>The largest impact of passive buying will be on <a href="https://www.smartkarma.com/entities/keurig-dr-pepper-inc" target="_blank" data-smartkarma-citation="entities:15411:1" rel="noopener">Keurig Dr Pepper Inc (KDP US)</a>, <a href="https://www.smartkarma.com/entities/on-semiconductor-corp" target="_blank" data-smartkarma-citation="entities:2729:1" rel="noopener">On Semiconductor (ON US)</a> and <a href="https://www.smartkarma.com/entities/vici-properties-inc" target="_blank" data-smartkarma-citation="entities:28786:1" rel="noopener">VICI Properties Inc (VICI US)</a>. </li>
</ul>


There are quite a few changes for stocks across the S&amp;P 500 (SPX INDEX), MidCap 400 Index and SmallCap 600 Index that will result in a one-way trade of US$30bn.
There are adds/deletes that have over 5 days of ADV to trade from passive funds, plus many stocks that have over +/-1 day of ADV from other changes.
The largest impact of passive buying will be on Keurig Dr Pepper Inc (KDP US), On Semiconductor (ON US) and VICI Properties Inc (VICI US). 


S&P500 Index Rebalance: One-Way Trade of US$30bn

United States

Keurig Dr Pepper Inc. manufactures and distributes non-alcoholic beverages. The Company offers soft drinks, juices, teas, mixers, water, and other beverages. Keurig Dr Pepper serves customers in the United States, Canada, and Mexico.

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Keurig Dr Pepper (KDP US)

Keurig Dr Pepper Inc.: Major Drivers

Keurig Dr Pepper delivered a decent set of results for the past quarter with its reported earnings being aligned with the analyst expectations...

Baptista Research

Keurig Dr Pepper: Partnership With Red Bull & Other Drivers

Keurig Dr Pepper’s quarterly results were a major disappointment as the company failed to meet market expectations in terms of revennues given the...

Baptista Research

Keurig Dr Pepper Inc.: Atypique Distribution Rights & Other Developments

Keurig Dr Pepper continues to battle inflationary challenges with price actions but its brand strength has been its biggest asset in the current...

Baptista Research

S&P500 Index Rebalance: One-Way Trade of US$30bn

There are 3 changes for the S&P500, plus more changes for the MidCap and SmallCap indices. We estimate a one-way trade of US$30bn across the...

Brian Freitas

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