Keurig Dr Pepper (KDP) Declined Following Acquisition Announcement

Oakmark Funds, advised by Harris Associates, released its “Oakmark Select Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund underperformed the benchmark, the S&P 500 Index, while it has outperformed the benchmark since inception. Communication services and energy were the largest contributors at the sector level, while consumer staples and consumer discretionary detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Oakmark Select Fund highlighted stocks such as Keurig Dr Pepper Inc. (NASDAQ:KDP). Keurig Dr Pepper Inc. (NASDAQ:KDP) owns and distributes beverages and single serve brewing systems. The one-month return of Keurig Dr Pepper Inc. (NASDAQ:KDP) was -5.07%, and its shares lost 28.94% of their value over the last 52 weeks. On October 9, 2025, Keurig Dr Pepper Inc. (NASDAQ:KDP) stock closed at $25.85 per share, with a market capitalization of $35.116 billion.

Oakmark Select Fund stated the following regarding Keurig Dr Pepper Inc. (NASDAQ:KDP) in its third quarter 2025 investor letter:

“Keurig Dr Pepper Inc. (NASDAQ:KDP) was the top detractor during the quarter. The U.S. beverage company’s stock fell after announcing the acquisition of JDE Peet’s, which owns a collection of global coffee brands. Once the combination is complete, Keurig Dr Pepper plans to split into two separate entities. One entity will specialize in coffee, while the other focuses on soft drinks. Separating the coffee and soft drink segments makes strategic sense, as synergy estimates appear conservative, and the multiple paid for JDE Peet’s was undemanding. In our view, investors reacted harshly to this announcement because the two-step transaction adds complexity, increases debt, and unexpectedly raises exposure to the coffee category. We believe the sell-off was overdone since Keurig Dr Pepper’s fundamentals remain healthy, the organization has a proven track record of deleveraging after prior deals, and the upcoming separation will expose the significant sum-of-the parts discount.”

Why Keurig Dr Pepper (KDP) is Emerging as One of the Most Resilient Food Dividend Stocks

Keurig Dr Pepper Inc. (NASDAQ:KDP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 46 hedge fund portfolios held Keurig Dr Pepper Inc. (NASDAQ:KDP) at the end of the second quarter, compared to 54 in the previous quarter.  While we acknowledge the risk and potential of Keurig Dr Pepper Inc. (NASDAQ:KDP) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Keurig Dr Pepper Inc. (NASDAQ:KDP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Keurig Dr Pepper Inc. (NASDAQ:KDP) and shared the list of best food dividend stocks, according to analysts. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.