"When the Oakmark Select Fund added Keurig Dr Pepper, shares traded at roughly 12x forward earnings, a discount to both the stock's own history and the broader beverage group. The setup checked every Oakmark box: a defensive consumer-staples cash flow profile, durable brands, and a near-term value-unlock catalyst in the pending JDE Peet's acquisition."
"The company has delivered. Full-year 2025 revenue rose 8.16% to $16.60 billion, adjusted EPS of $2.05 beat the $2.04 estimate, and free cash flow reached $1.52 billion. The JDE Peet's deal closed April 1, 2026, turning Keurig Dr Pepper into a global coffee operator across 100-plus markets."
"Wednesday's Q1 2026 print was the inflection. Revenue of $3.98 billion rose 9.4% and beat the $3.83 billion consensus, adjusted EPS of $0.39 topped the $0.37 estimate, and operating cash flow expanded 34.5% to $281 million."
Bill Nygren's Oakmark Select Fund increased its stake in Keurig Dr Pepper when shares were undervalued at 12x forward earnings. The investment was based on a strong cash flow profile and durable brands. Execution risks had caused the stock price to drop, but Nygren believed these risks were already reflected in the price. Following the acquisition of JDE Peet's, Keurig Dr Pepper reported strong revenue growth and exceeded earnings expectations, reaffirming positive guidance for future sales and earnings growth.
Read at 24/7 Wall St.
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