Trouble Still Brewing at Keurig Dr Pepper (KDP)

Despite recent underperformance, KDP’s payables remain a significant risk

We have been warning about red flags in Keurig Dr Pepper’s (KDP) financial results for some time. The stock had already underperformed the market and its soft drink peers over the last year even before its recent near-10% drop since reporting first-quarter earnings. On a forward PE basis, it looks cheaper than Coke (KO) or PepsiCo (PEP), although we still don’t see either of those as offering much in the way of untapped value. However, we still see the company’s earnings as overstated and believe it has a significant problem with its payables that the market has yet to address.

We will take a closer look at 1Q’23 results below.