Keurig Dr Pepper Presents 'Compelling' Valuation Despite Coffee Softness, Says Morgan Stanley Analyst

Shares of Keurig Dr Pepper Inc KDP climbed in early trading on Thursday, but are still trading lower by about 9% year to date.

The stock is at an “opportune entry point,” following its underperformance, according to Morgan Stanley.

The Keurig Dr Pepper Analyst: Dara Mohsenian upgraded the rating for Keurig Dr Pepper from Equal-Weight to Overweight, while keeping the price target unchanged at $36.

The Keurig Dr Pepper: The “strong and highly visible” trends in refreshment beverages offers the company the flexibility to offset weakness in coffee trends, Mohsenian said in the upgrade note.

Check out other analyst stock ratings.

“Coffee softness is real and an admitted continued risk factor, but we are heartened that some of [the] recent weakness is tied to more transitory or less value-impacting factors longer-term,” the analyst wrote.

“Said more simply, we don't pretend to have complete visibility in coffee, but with some of the weakness tied more to factors that don't drive long-term value, and a clear path of continued upside in US refreshment beverages, KDP's valuation looks compelling hereafter outsized stock underperformance,” he added.

KDP Price Action: Shares of Keurig Dr Pepper were up 2.05% to $32.40 at the time of publication Thursday.

Now Read: Cathie Wood's Ark Trims Nvidia Stake By $2.7M To Load Up On Rival Chip Stock: Here Are Other Big Ticket Buys From Wednesday

Photo: Shutterstock