Keurig Dr Pepper (KDP) is likely to deliver 2026 guidance largely in line with its long-term algorithm, with mid-single-digit constant-currency net sales growth and high-single-digit EPS growth for the core business, RBC Capital Markets said in a Thursday note.

The brokerage said the pending acquisition of JDE Peet's could become a key growth driver beginning in the second half of 2026, potentially adding about 5 billion euros ($5.9 billion) in revenue to fiscal 2026 and roughly a 5% boost to earnings if the deal closes in the first half of the year.

According to the report, the company appears undervalued versus peers, trading at about 13.5x two-year forward earnings, roughly a 30% discount to the beverage group, but the unusual structure of the JDE Peet's deal has weighed on sentiment and kept short interest elevated.

US beverage trends remain steady and coffee demand has been resilient despite weaker brewer sales, RBC said, adding that the company continues to focus on recyclable packaging, water efficiency, renewable energy, and diversity initiatives.

The firm maintained its outperform rating on the stock with a $42 price target.

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