HSBC Upgrades Keurig Dr Pepper to Buy With $40 Target After Q2 Beat

Keurig Dr Pepper received an upgrade to Buy from Hold at HSBC Securities on August 13, with analysts setting a $40 price target and pointing to upside in the stock. The move followed KDP's Q2 2026 results, reported August 6, in which the company posted adjusted diluted EPS of $0.57, up 16.3% year over year and ahead of the consensus estimate of $0.55. Net sales surged 75.6% to $7.31 billion, though the bulk of that growth reflects the April 1 acquisition of JDE Peet's.

Excluding JDE Peet's, legacy KDP net sales rose 7.3%, driven by favorable performance in U.S. Refreshment Beverages, which generated double-digit top- and bottom-line growth. KDP reaffirmed its full-year 2026 guidance, targeting net sales of $25.9 billion to $26.4 billion and constant-currency adjusted diluted EPS growth in the low-double-digit range, with foreign-currency translation expected to contribute roughly a one-percentage-point tailwind.

The company also reiterated its target of a pro-forma management leverage ratio of approximately 4.1 times by year-end. KDP shares outperformed peers on the day of the upgrade, reflecting investor confidence in both the earnings trajectory and the ongoing JDE Peet's integration.