10:32 AM EDT, 08/26/2025 (MT Newswires) -- Keurig Dr Pepper's ( KDP ) underlying business momentum is "still sound" despite uncertainties ahead, Deutsche Bank said in a Tuesday note.

The market has initially reacted negatively to the company's plan to acquire JDE Peet's and subsequently spin off the combined coffee business, with the company's stock down 11.5% compared to the S&P 500 being down only 0.4%, Deutsche Bank analysts said.

The analysts noted the various risks and uncertainties surrounding the company, including increased debt and balance sheet leverage after the planned transaction closes, general integration complexity, and the challenges related to executing the two-step transaction. Also on the list of concerns are the unclear future capital structures and debt paydown schedules associated with the future coffee or beverage business, they said.

However, the analysts said they see the potential for "better-than-expected coffee performance" leading into fiscal 2026, due to favorable price elasticities and ramping productivity.

The analysts also projected that 500 million euros ($582 million) in associated savings and $400 million in incremental deal synergies should help fund incremental investment and protect against possible downside risks.

Deutsche Bank maintained the company's stock rating at buy and cut its price target to $38 from $40.

Price: 30.32, Change: -0.79, Percent Change: -2.52