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Keurig Dr Pepper Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Beverages - Non-AlcoholicSector: Consumer Defensive

Fair Value Summary

Current Price$28.59
5Y Range24.16 – 42.74
5Y Selected33.45
(-) Safety Margin65.23%
5Y Buy Price$11.63
Upside (to Buy Price)-59.32%
10Y Range27.51 – 46.28
10Y Selected36.90
(-) Safety Margin65.23%
10Y Buy Price$12.83
Upside (to Buy Price)-55.13%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9733
Revenue R2 (10Y)0.9505
Net Income R2 (5Y)0.0101
Net Income R2 (10Y)0.5664
EBITDA R2 (5Y)0.0576
EBITDA R2 (10Y)0.7692
FCF R2 (5Y)0.2622
FCF R2 (10Y)0.2621
Safety Score0.3477

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth7.09%6.75%6.41%6.06%5.72%5.37%5.03%4.69%4.34%4.00%
Revenue16,439.8017,549.3318,673.4419,805.3920,937.8922,063.2023,173.1824,259.3725,313.1126,325.63
EBITDA4,477.394,779.575,085.725,394.015,702.456,008.936,311.236,607.066,894.047,169.80
D&A-827.88-883.75-940.36-997.36-1,054.40-1,111.06-1,166.96-1,221.66-1,274.72-1,325.71
EBIT3,649.513,895.824,145.364,396.654,648.054,897.865,144.275,385.405,619.325,844.09
Pro forma Taxes-856.66-914.47-973.05-1,032.03-1,091.05-1,149.69-1,207.53-1,264.13-1,319.03-1,371.80
NOPAT2,792.852,981.353,172.313,364.613,557.013,748.183,936.754,121.274,300.284,472.30
Capital Expenditures-541.83-578.40-615.45-652.76-690.09-727.17-763.76-799.56-834.29-867.66
NWC Investment98.28100.15101.47102.17102.22101.58100.1998.0495.1191.39
(+) D&A827.88883.75940.36997.361,054.401,111.061,166.961,221.661,274.721,325.71
Free Cash Flow3,177.183,386.853,598.693,811.394,023.544,233.644,440.144,641.424,835.845,021.74
Diluted Shares Outstanding1,364,050,000.001,364,050,000.001,364,050,000.001,364,050,000.001,364,050,000.001,364,050,000.001,364,050,000.001,364,050,000.001,364,050,000.001,364,050,000.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.451.452.463.464.465.466.467.468.46
Valuation Date1/17/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.48%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF3,149.633,256.703,171.833,076.482,976.892,871.122,760.052,644.562,525.562,403.95
Raw: 62,257.12
44,099.59
Raw: 77,702.54
35,612.03

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value59,731.1264,448.81
(-) Net Debt16,970.7516,970.75
Equity Value42,760.3747,478.06
(/) Shares Out1,364.051,364.05
Fair Value$31.35$34.81
(-) Safety Margin65.23%65.23%
Buy Price$10.90$12.10
Current Price$28.59$28.59
Upside (to Buy Price)-61.88%-57.67%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.98%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF3,146.763,243.363,130.143,008.202,884.372,756.632,625.922,493.192,359.382,225.36
Raw: 50,512.64
34,510.68
Raw: 63,044.37
26,625.80

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value49,923.5154,499.10
(-) Net Debt16,970.7516,970.75
Equity Value32,952.7637,528.35
(/) Shares Out1,364.051,364.05
Fair Value$24.16$27.51
(-) Safety Margin65.23%65.23%
Buy Price$8.40$9.57
Current Price$28.59$28.59
Upside (to Buy Price)-70.62%-66.54%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.98%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.890.830.760.710.650.600.560.52
PV UFCF3,152.533,270.223,214.473,146.973,073.262,991.492,902.372,806.652,705.152,598.71
Raw: 80,879.43
59,418.29
Raw: 100,944.88
50,243.29

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value75,275.7480,105.11
(-) Net Debt16,970.7516,970.75
Equity Value58,304.9963,134.36
(/) Shares Out1,364.051,364.05
Fair Value$42.74$46.28
(-) Safety Margin65.23%65.23%
Buy Price$14.86$16.09
Current Price$28.59$28.59
Upside (to Buy Price)-48.02%-43.71%

Reverse DCF: Market Implied Growth

Current Price$28.59
WACC Used9.1%
IMPLIED REVENUE GROWTH135.08%
Metric2027202820292030203120322033203420352036
Implied Revenue38,022.3389,384.03210,126.66493,972.071,161,244.402,729,888.266,417,503.4415,086,460.1135,465,704.1983,373,844.15
Constant Implied Growth135.08%135.08%135.08%135.08%135.08%135.08%135.08%135.08%135.08%135.08%
Implied Free Cash Flow3.808.9421.0149.40116.12272.99641.751,508.653,546.578,337.38
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF3.547.2115.5533.5072.18155.54335.16722.201,556.193,353.25

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$28.957.89%$20.96-27.61%
20182018-12-31$25.647.68%$13.02-49.21%
20172017-12-31$15.638.66%$75.38382.30%
20162016-12-31$14.60-26.37%$2.65-81.85%
20152015-12-31$15.01-44.10%$-6.04-140.27%
20142014-12-31$11.54-44.76%$-5.26-145.60%
20132013-12-31$7.84-29.55%$-0.25-103.16%
20122012-12-31$7.115.27%$11.9267.61%
20112011-12-31$6.364.54%$36.31470.85%
20102010-12-31$5.664.79%$169.222,889.82%
20092009-12-31$4.566.96%$33.31630.46%
20082008-12-31$2.628.32%$21.31713.48%
20072007-12-31$4.367.39%$18.76330.31%
20062006-12-31$4.363.91%$14.97243.37%
20052005-12-31$4.364.13%$27.15522.72%
20042004-12-31$4.3612.73%$41.32847.60%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$35.84
Median
$34.74
10th Percentile
$27.33
90th Percentile
$45.61

Fair Value Distribution

$19.05 - $21.62
4
$21.62 - $24.19
28
$24.19 - $26.76
53
$26.76 - $29.33
106
$29.33 - $31.90
138
$31.90 - $34.47
150
$34.47 - $37.04
126
$37.04 - $39.61
115
$39.61 - $42.18
100
$42.18 - $44.75
64
$44.75 - $47.32
45
$47.32 - $49.89
27
$49.89 - $52.46
13
$52.46 - $55.03
12
$55.03 - $57.60
11
$57.60 - $60.17
2
$60.17 - $62.74
2
$62.74 - $65.31
0
$65.31 - $67.89
2
$67.89 - $70.46
2