KDP - Keurig Dr Pepper is called a long-term beverage stock winner by BofA

Bank of America kept a bullish stance on Keurig Dr Pepper ( NASDAQ: KDP ) after hosting a fireside chat with management.

The firm's broad conclusion is that it appears attachment rates are reverting to pre-COVID levels. While indications are that holiday sales may have been soft for KDP,  BofA still sees KDP positioned to deliver its long-term algorithm over time, but more likely closer to the low end of the range in FY23.

The long-term view is that KDP offers investors an opportunity to tap into the US non-alcoholic beverage market with a broad array of products that address multiple need states and day parts with a selling and distribution platform with scale across all retail channels.

"We expect KDP shares to outperform the broader market as we forecast solid free cash flow and deleveraging," noted analyst Bryan Spillane.

BofA's price objective of $45 works out to 23X the FY24 EPS estimate, which is a 1x discount versus non-alcoholic beverage peers. The price objective also represents more than 2% upside for KDP shares.

Seeking Alpha contributor Wolf Value also made the case last month that KDP was undervalued.

For further details see: