12:19 PM EDT, 04/26/2024 (MT Newswires) -- Keurig Dr Pepper ( KDP ) could see accelerating organic revenue growth given its innovation timing, improving underlying category trends in its coffee business, and new and existing partnerships in its coffee and US refreshment beverages businesses, UBS Global Research said in a note.

The company reported Q1 adjusted earnings of $0.38 per diluted share, compared with $0.34 a year earlier, as revenue increased to $3.47 billion from $3.35 billion. UBS said the period's adjusted EPS topped its forecast and Street view. Gross margins also exceeded expectations and organic growth was "better than feared," the investment firm added.

"Coffee came in better-than-feared and displayed solid YoY margin improvement despite meaningful reinvestment," said UBS. The investment firm also said it expects the company's coffee volume to improve sequentially from Q1, though profit margin expansion for its US coffee segment is more "H1-loaded" as pressure from rising green coffee prices could weigh on H2.

UBS reiterated its buy rating on Keurig Dr Pepper ( KDP ), with a higher price target of $39 from $36 previously.

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