Beverages Maker Keurig Dr Pepper's Shares Rise On Analyst Upgrade: Retail Investors Not Impressed Yet

Shares of beverages maker Keurig Dr Pepper Inc (KDP) closed 2.2% higher on Tuesday after Morgan Stanley raised its price target on the company's shares.

The research firm upped its rating to 'Overweight' from 'Equal Weight' and its price target by $2 to $40.

Morgan Stanley said the company behind 7UP and a dozen other beverages has shown highly visible strength in its U.S. refreshment segment and international markets. 

Potential price increases in the refreshment industry are likely to provide more upside.

The firm said the market is not recognizing Keurig Dr Pepper's organic sales and earnings growth prospects compared to consumer packaged goods peers.

Last month, Citi named Keurig Dr Pepper its top pick in the analyst's beverages, household and personal care group.

It said it picked firms "that are posting better near-term trends, have idiosyncratic opportunities, and have a lower valuation level."

Keurig Dr Pepper reported fourth-quarter results in February, exceeding market expectations for revenue and EPS. The company will announce Q1 results on Apr. 24.

On Stocktwits, retail sentiment remained 'bearish', although the message volume rose to 'high' from 'extremely low' the previous day.

Several users posted about the rating news, with one saying that the stock could climb further if it closes above $34.65.

Shares ended at $34.97 on Tuesday, up nearly 9% year to date.

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