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While Everyone Sold KDP, Bill Nygren Bought. Now the Rally Is Here.

Bill Nygren’s Oakmark Select Fund disclosed an increased position in Keurig Dr Pepper (NASDAQ: KDP | KDP Price Prediction) in its fourth-quarter 2025 commentary, buying the beverage giant while the stock drifted through the mid-$20s and most of Wall Street…

By Trey Thoelcke
Published April 24, 2026, 8:55am ET · 3 min read

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Six metallic silver cubes, resembling dice, are scattered across a blue background showing financial charts and numerical data. The visible faces of the cubes display the words 'BUY' or 'SELL' in black letters, while candlestick charts and grid lines create a market analysis aesthetic.
Metallic dice displaying 'BUY' and 'SELL' illustrate the critical choices investors face in the market, echoing the 'dividend dice roll' concept discussed in the article. © Bet_Noire / iStock via Getty Images

Bill Nygren’s Oakmark Select Fund disclosed an increased position in Keurig Dr Pepper (NASDAQ: KDP | KDP Price Prediction) in its fourth-quarter 2025 commentary, buying the beverage giant while the stock drifted through the mid-$20s and most of Wall Street walked away. On April 23, 2026, shares jumped 7.5% after a first-quarter earnings beat, a belated nod to a thesis Nygren laid out months earlier.

 

What Nygren Saw in Q4 2025

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 (Dr Pepper, Keurig, Snapple, GHOST, Mott’s), and a near-term value-unlock catalyst in the pending JDE Peet’s acquisition and planned separation into two pure-play companies, beverages and global coffee.

Execution risk was the reason the multiple compressed. Nygren’s view, as summarized in Oakmark’s commentary and prior 24/7 Wall St. coverage, was that those risks were already priced in. Shares had slid from $32.58 at the Q2 2025 filing to $28.33 by late October, giving patient capital a cheap entry into a business generating $16.6 billion in annual revenue.

What Has Happened Since

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. U.S. Refreshment Beverages grew 11.9%, and management reaffirmed guidance for $25.9 billion to $26.4 billion in 2026 net sales with low-double-digit constant-currency adjusted EPS growth. CEO Tim Cofer called it “a solid first quarter, with strong momentum in our cold beverage portfolio.”

Is It Still a Buy at Current Levels?

Even after the rally, the math that attracted Oakmark has barely budged. The stock trades at 12x forward earnings against a trailing multiple of 19, with a beta of 0.361 and EV/EBITDA of 12. The consensus price target of $32.81 exceeds the current $28.53, but the one-year chart still shows an 18.9% decline.

The risks are concrete. The JDE Peet’s financing pushed total principal debt to roughly $25.9 billion, quarterly interest expense roughly doubled year over year to $281 million, and GAAP net income fell 47.8% on deal costs. U.S. Coffee volume dropped 8.2%, and a credit-rating downgrade remains possible. Dividend sustainability through the planned spin-off is also an open question for income-focused holders.

Nygren’s thesis has been validated, and the setup that drew him in, a low-teens forward multiple on a staple business with a separation catalyst ahead, largely remains. The easy vindication trade is over. The patient, value-investor case that the two pure-play companies will be worth more apart than together is still intact, provided integration and balance-sheet discipline hold.

 

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Trey Thoelcke

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, moderating workshop sessions at regional conventions.

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