As of June 17, 2025, Keurig Dr Pepper Inc has a Discounted Cash Flow (DCF) derived fair value of $48.55 per share. With the current market price at $33.10, this represents a potential upside of 46.7%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $40.21 |
| DCF Fair Value (10-year) | $48.55 |
| Potential Upside (5-year) | 21.5% |
| Potential Upside (10-year) | 46.7% |
| Discount Rate (WACC) | 5.3% - 6.8% |
Revenue is projected to grow from $15351 million in 12-2024 to $24032 million by 12-2034, representing a compound annual growth rate of approximately 4.6%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 15351 | 4% |
| 12-2025 | 16090 | 5% |
| 12-2026 | 17089 | 6% |
| 12-2027 | 17431 | 2% |
| 12-2028 | 18399 | 6% |
| 12-2029 | 19410 | 5% |
| 12-2030 | 20029 | 3% |
| 12-2031 | 21058 | 5% |
| 12-2032 | 21726 | 3% |
| 12-2033 | 23407 | 8% |
| 12-2034 | 24032 | 3% |
Net profit margin is expected to improve from 9% in 12-2024 to 13% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 1441 | 9% |
| 12-2025 | 1662 | 10% |
| 12-2026 | 1881 | 11% |
| 12-2027 | 2034 | 12% |
| 12-2028 | 2265 | 12% |
| 12-2029 | 2513 | 13% |
| 12-2030 | 2593 | 13% |
| 12-2031 | 2726 | 13% |
| 12-2032 | 2813 | 13% |
| 12-2033 | 3031 | 13% |
| 12-2034 | 3112 | 13% |
with a 5-year average of $491 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 503 |
| 12-2026 | 536 |
| 12-2027 | 586 |
| 12-2028 | 622 |
| 12-2029 | 638 |
| 12-2030 | 666 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 36 |
| Days Inventory | 73 |
| Days Payables | 212 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 2567 | 365 | 435 | (768) | 2535 |
| 2026 | 3785 | 551 | 616 | 399 | 2220 |
| 2027 | 4049 | 595 | 629 | 127 | 2698 |
| 2028 | 4432 | 663 | 664 | (188) | 3293 |
| 2029 | 4816 | 736 | 700 | 120 | 3260 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 40.21 | 21.5% |
| 10-Year DCF (Growth) | 48.55 | 46.7% |
| 5-Year DCF (EBITDA) | 27.44 | -17.1% |
| 10-Year DCF (EBITDA) | 35.59 | 7.5% |
Is Keurig Dr Pepper Inc (KDP) a buy or a sell? Keurig Dr Pepper Inc is definitely a buy. Based on our DCF analysis, Keurig Dr Pepper Inc (KDP) appears to be significantly undervalued with upside potential of 46.7%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $33.10.