Is Keurig Dr Pepper Inc (KDP) overvalued?
On Equity Rank's model estimate, KDP trades close to its fair value (7% below it). Keurig Dr Pepper Inc (KDP) last closed at $36.63; the multi-method model fair value is $39.40.
| Price | Model fair value | Price vs model |
|---|---|---|
| $36.63 | $39.40 | 7% below |
What the answer rests on
- 2 of 10 valuation methods put KDP's value above its price and 8 put it below, so the methods mostly agree.
- To justify today's price, KDP's free cash flow would need to grow about 6.0% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -15.1% a year.
- KDP trades at 33.1 times its last year's earnings, against a median of 20.3 for 19 profitable Beverages companies.
- Over the past year the price sat below the model fair value on 79% of trading days. The gap ranged from 18% below to 17% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind KDP's fair value · What prices assume · Other companies