- 2025 Performance: Net sales rose 8.6%, operating income up 4.9%, and EPS grew 7.3% on a constant currency basis.
- 2026 EPS Guidance: Targets low double-digit growth, with JDE Peet's acquisition contributing 6-7% to EPS growth ($0.36-0.37 EPS in Q1 despite headwinds).
- Separation & Integration: Plans to split into Beverage Co and Global Coffee Co; JDE Peet's acquisition (adding $8.5-8.7B sales) expected to close April 2026.
- International Growth: Net sales surged 16% in constant currency (2025), driven by 9.2% net price realization and 6.8% volume mix growth.
- Free Cash Flow: $1.519B in 2025, targeting $2B in 2026 (vs. $1.07-1.12B interest expense) as cost headwinds moderate in H2.
Segment Performance
The company's international business also showed promising growth, with net sales increasing 16% in constant currency, driven by net price realization and volume mix. The US refreshment beverages segment is expected to continue its strong performance in 2026, with the company planning to drive innovation and growth. As Anthony DiSalvestro, the new CFO, expressed enthusiasm for the company's direction and potential, highlighting the unique value creation opportunity presented by the JDE Peet's acquisition.
Outlook and Guidance
Keurig Dr Pepper Inc. expects low double-digit EPS growth in 2026, driven by the JDE Peet's acquisition, which is expected to contribute 6-7 percentage points to EPS growth. The company has provided guidance for Q1 EPS in the range of $0.36-0.37 and expects EPS growth to be positive in Q2 and accelerate further in the second half. The company's free cash flow is expected to increase to approximately $2 billion in 2026, with a refined financing plan in place for the JDE Peet's acquisition.
Valuation and Metrics
With a current P/E Ratio of 20.27, P/B Ratio of 1.65, and EV/EBITDA of 16.02, the market appears to have priced in a significant level of growth for Keurig Dr Pepper Inc. The company's ROE of 8.29% and ROIC of 5.5% indicate a reasonable return on equity and invested capital. As the company navigates the integration of JDE Peet's and the separation into two pure-play companies, investors will be watching closely to see if the company can deliver on its growth promises.