DCF Studio

    KDP · NMS · Consumer Defensive

    Keurig Dr Pepper Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 77.55

    Market price

    USD 36.82

    Implied upside

    +110.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 77.55+110.6%
    Exit multiple
    USD 97.66+165.2%
    Market price
    USD 36.82

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn6bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 24.9bnUSD 28.3bnUSD 31.9bnUSD 35.4bnUSD 38.8bnUSD 41.9bnUSD 44.7bnUSD 47.1bnUSD 49.0bnUSD 50.2bn+8.1%
    EBITUSD 5.3bnUSD 6.0bnUSD 6.8bnUSD 7.5bnUSD 8.2bnUSD 8.9bnUSD 9.5bnUSD 10.0bnUSD 10.4bnUSD 10.7bn+8.1%
    NOPATUSD 4.2bnUSD 4.8bnUSD 5.3bnUSD 5.9bnUSD 6.5bnUSD 7.0bnUSD 7.5bnUSD 7.9bnUSD 8.2bnUSD 8.4bn+8.1%
    Add depreciation & amortisationUSD 1.2bnUSD 1.4bnUSD 1.5bnUSD 1.7bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.3bnUSD 2.4bnUSD 2.4bn+8.1%
    Less capital expenditureUSD -810.9mUSD -1.1bnUSD -1.5bnUSD -1.9bnUSD -2.4bnUSD -2.9bnUSD -3.4bnUSD -3.9bnUSD -4.4bnUSD -4.9bn+22.1%
    Capex, % of revenue3.3%4.0%4.7%5.4%6.1%6.8%7.6%8.3%9.0%9.7%-
    Less increase in working capitalUSD 354.3mUSD 146.9mUSD 150.1mUSD 149.5mUSD 144.5mUSD 135.0mUSD 120.7mUSD 101.8mUSD 78.7mUSD 52.3m+19.2%
    Free cashflow to firmUSD 4.9bnUSD 5.1bnUSD 5.5bnUSD 5.9bnUSD 6.1bnUSD 6.3bnUSD 6.4bnUSD 6.4bnUSD 6.2bnUSD 6.0bn+2.2%
    Discount factor0.96850.90840.85210.79930.74970.70320.65960.61870.58040.5444-
    Present valueUSD 4.8bnUSD 4.7bnUSD 4.7bnUSD 4.7bnUSD 4.6bnUSD 4.4bnUSD 4.2bnUSD 3.9bnUSD 3.6bnUSD 3.3bn-
    Present Value Of The ForecastUSD 42.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.568Reported 0.355, pulled toward 1.0 (Blume)
    Cost of equity7.30%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 4.8x interest cover. Book interest / average debt was lower, at 4.8%.
    Market capitalisationUSD 50.1bn75.6% of capital
    Total debtUSD 16.1bn24.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.61%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 77.55

    64% of EV

    Forecast FCFF, final year
    USD 6.0bn
    Capex at depreciation, working capital in reinvestment
    USD 9.2bn
    Less reinvestment at g/ROIC (37.8% of NOPAT)
    USD -3.5bn
    Capitalised
    USD 5.7bn
    ROIC (WACC floor)
    6.6%
    Terminal value, undiscounted
    USD 143.1bn
    Terminal value, discounted
    USD 77.9bn
    Enterprise value
    USD 120.8bn
    Less net debt
    USD 15.1bn
    Equity value
    USD 105.7bn

    Exit at 14.8x EBITDA

    Value per shareUSD 97.66

    71% of EV

    Terminal value, undiscounted
    USD 193.4bn
    Terminal value, discounted
    USD 105.3bn
    Enterprise value
    USD 148.2bn
    Less net debt
    USD 15.1bn
    Equity value
    USD 133.1bn

    Spread between methods: 23%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.61%137.54144.56155.54174.16210.76
    5.61%101.56102.31103.72106.15110.33
    6.61%79.9078.7377.5576.3775.20
    7.61%67.3166.3565.3864.4263.45
    8.61%57.6856.8756.0755.2654.46

    Outlined: this model. Green text: above today's price of 36.82. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year5.7%11.7%4.2%
    EBIT margin22.0%21.2%10.4%
    Discount rate-6.6%11.8%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.