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KDP Stock Gains Traction: Reversal in Progress
Reported by Thomas Hughes. Posted: 2/24/2026.
Keurig Dr Pepper's (NASDAQ: KDP) stock has been under pressure for years as its businesses struggled, strategy concerns emerged and analysts panned the name. That story is changing: core businesses have returned to growth and the planned separation into two publicly traded companies is progressing.
Details from the fiscal Q4 2025 earnings report include updates on the separation plans and financing for JDE Peet. Keurig Dr Pepper raised $1.5 billion more than previously expected via an equity offering, enabling a better outcome for shareholders. In this scenario, no additional financing is needed and the merger/split into two freestanding, pure-play companies appears to be moving forward smoothly.
KDP Outperforms Competitors in Fiscal Q4
Keurig Dr Pepper reported a solid FQ4, with revenue rising 10.5% to $4.45 billion, outpacing competitors and consensus estimates. Growth was broad-based, led by a 21% increase in International, an 11.5% gain in U.S. refreshment beverages and a 3.9% rise in U.S. coffee. Strength was driven by pricing (up 6%) and volume/mix (up 3.9%).
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Margin trends were also constructive. While the company faced margin pressures, it navigated the environment well and delivered income and earnings growth above forecasts, though more muted than the top-line gains. Adjusted operating income rose nearly 5%, adjusted earnings increased about 2%, and free cash flow was ample at $564 million, supporting capital returns and balance-sheet improvements ahead of the planned merger.
Guidance was upbeat. The company forecast its core business to grow roughly 5% on a currency-neutral basis — above the MarketBeat consensus — and signaled strong full-year results. The release had a positive impact on sentiment, although analysts did not immediately issue revisions. Prerelease updates issued in late 2025 affirmed a Moderate Buy rating and a $35 price target. That $35 target is notable because it sits about 15% above a key support level and just above the long-term EMA; a sustained move above the long-term EMA near $31.75 would signal a change in dynamics and potential for further upside.
Key Points
- Keurig Dr Pepper's acquisition/split is on track to be completed this year.
- Analysts and institutional data reveal the stock is being accumulated.
- A successful split into pure-play companies can unlock a price-to-earnings expansion.
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Institutions Indicate KDP is One Hot Buy
The institutional activity in KDP stock is bullish, indicating it is a hot buy for long-term holders. MarketBeat's data shows institutions owning roughly 94% of the stock and were net buyers over the trailing 12 months. Aside from Q3 2025 profit taking, bullish activity ramped to long-term highs in 2025 and extended into Q1 2026, when it set a record. The activity balance in Q1 exceeded $3 of buying for every $1 of selling — a robust tailwind for price action likely to continue.
One incentive for institutions is the eventual split into pure-play companies, which could drive multiple expansion. Today, the combined entity trades around 15x current-year earnings, a 30%–60% discount versus beverage peers PepsiCo (NASDAQ: PEP) and Coca-Cola (NYSE: KO), and an even deeper discount relative to coffee peers. Starbucks (NASDAQ: SBUX), the world's largest coffee brand, trades near 40x the current-year outlook, implying the Global Coffee Co. could see meaningful upside after a separation.
KDP Advances After Robust Guidance
KDP's share price reacted positively to the release, rising more than 3% and finding support at the 150-day and 30-day EMAs while reaching a six-month high. Technical indicators such as the stochastic oscillator and MACD are aligned with the market strength. There is a risk the stock could top out near resistance around $31.75; if so, shares might correct toward the $29 level or lower before resuming any upside.
Key risks remain execution and the merger process. The transaction is on track but could be derailed by regulatory hurdles. Even if the merger closes as planned, integration and execution will be challenging as the company prepares for the next step. Increased leverage also raises the potential for constrained cash flow in upcoming quarters. Near-term catalysts include a successful merger, sustained improvement in core consumer businesses, and continued progress toward the eventual split.
Shopify Defies Logic: AI Disruption Is a Good Thing
Author: Thomas Hughes. Article Published: 2/11/2026.
Key Points
- Shopify's SaaS services are being disrupted by AI, and it's a good thing for investors.
- Growth is sustained at a 30% pace, margins are strong, and cash flow enables capital returns.
- Analyst sentiment is robustly bullish, pushing this market towards record highs.
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Shopify's (NASDAQ: SHOP) Q4 2025 earnings report is a striking example of how AI disruption can be positive—at least for companies positioned to monetize it effectively. Shopify, a leading provider of eCommerce solutions for businesses of all sizes, has integrated AI across its stack and offers a platform and tools that simplify, accelerate, and automate processes for merchants and consumers.
The critical takeaway: this megacap sustains roughly a 30% growth pace, expects the trend to continue, and generates strong cash flow — a new buyback underscores the company's financial strength.
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AI is not hurting the business. Shopify's board authorized a new $2 billion buyback program, about 3% of the pre-release market cap. The repurchases will be executed algorithmically over the coming quarters and are expected to help limit downside risk in the event of price pullbacks.
Shopify Blows Past Consensus, Guides for Strength in 2026
Shopify delivered a robust quarter with revenue growth sustained in the low-30% range. Net revenue of $3.67 billion was up 30.6%, roughly 220 basis points above consensus, driven by strength across regions, channels, and business sizes.
Subscriptions, the smaller segment, grew 16.6% while Merchant Solutions grew 35%. Gross merchandise volume rose about 31%, and gross payment volume was up 37%. International and Business-to-Business (B2B) traffic stood out, rising 33% and 96%, respectively.
Margins held up better than expected. While the company did experience margin pressure, it was less severe than forecast thanks to AI-driven efficiencies and revenue leverage. Higher marketing and R&D spending is a concern but these are controllable investments — gross profit increased roughly 25% and free cash flow improved about 19%, suggesting those investments are paying off.
Guidance drove the share-price reaction. Shopify issued strong Q1 guidance, targeting low-30% revenue growth, nearly 500 basis points above consensus.
Operating expenses are expected to rise as the company invests for growth, but those investments should reinforce Shopify's revenue and earnings trajectory. Importantly, they do not impair capital returns or balance-sheet health: the company has no debt and is net cash on a total-liabilities basis.
Analysts Point to Fresh All-Time Highs in 2026: A Critical Pivot Will be Crossed
Analyst sentiment is strongly bullish and likely to firm as Q1 2026 unfolds. Coverage has increased — 45 analysts tracked by MarketBeat covered SHOP in early February, assigning the stock a consensus Buy. Price-target trends are also positive and sentiment appears to be strengthening.
Upgrades issued the day before the release put consensus price targets in the $170–$200 range, which would be sufficient to set a fresh all-time high at the midpoint.
A move to fresh highs would be a significant pivot. Using the pre-breakout trading range (about $145) projected from the breakout point would place the stock well above $300 — a level that could be reached within a few quarters after a successful breakout.
Risks include institutional activity. The institutional group owns more than 60% of the stock and was a modest headwind in early 2026, with selling narrowly outpacing buying and leaving the market susceptible to a correction driven by AI-related fears. If institutions continue to sell into this rally, the market could struggle to make new highs. The opportunity is that institutions may revert to accumulation now that guidance is set, turning a headwind into a tailwind.
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