Keurig Dr Pepper stock is likely to rebound as the beverage company reassures investors it can pull off its planned coffee business spinout, according to Barclays. The investment bank upgraded Keurig Dr Pepper to overweight from equal weight. It also hiked its price target on shares to $36 from $30, implying 15% upside from Wednesday’s close. “While we were inclined to think [the company’s] reshuffling of assets would prove to be the right move over time, we were wary of the path to get there,” analyst Lauren Lieberman said Thursday in a note to clients. “Nine months later, several pieces of the puzzle have fallen into place – in part through decisive actions by KDP to address primary investor concerns (e.g. private credit financing, separation mechanics) – helping to de-risk the way forward.” Shares of Keurig Dr Pepper have fallen nearly 5% over the past year, largely due to uncertainties over its plan to cleave off its coffee businesses. The move, announced in late August, aims to create two distinct entities, Beverage Co. and Global Coffee Co., by early 2027. KDP 1Y mountain Shares have fallen roughly 5% over the past year. The spinout comes months after Keurig Dr Pepper signaled it would acquire Dutch coffee and tea company JDE Peet’s for roughly $18 billion. In the leadup to its spinoff, Keurig Dr Pepper has shown signs of “improved leverage and waning transaction uncertainty,” boosting investors’ confidence in its stock, according to Barclays. However, Wall Street is still split on Keurig Dr Pepper. Of the 18 analysts covering the beverage name, 9 have a buy or strong buy on the stock, while 9 have a hold rating on it, LSEG data shows. Shares were flat in the premarket despite the upgrade.
