Earnings Update: Keurig Dr Pepper Inc. (NASDAQ:KDP) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

Last week, you might have seen that Keurig Dr Pepper Inc. (NASDAQ:KDP) released its full-year result to the market. The early response was not positive, with shares down 2.5% to US$30.19 in the past week. The result was positive overall - although revenues of US$15b were in line with what the analysts predicted, Keurig Dr Pepper surprised by delivering a statutory profit of US$1.55 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Keurig Dr Pepper

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Taking into account the latest results, the current consensus from Keurig Dr Pepper's 15 analysts is for revenues of US$15.4b in 2024. This would reflect a satisfactory 4.0% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$1.59, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$15.5b and earnings per share (EPS) of US$1.71 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$35.43, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Keurig Dr Pepper analyst has a price target of US$41.00 per share, while the most pessimistic values it at US$27.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Keurig Dr Pepper's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 9.5% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Keurig Dr Pepper is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Keurig Dr Pepper. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Keurig Dr Pepper's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Keurig Dr Pepper going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Keurig Dr Pepper (of which 1 can't be ignored!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.