KDP Shares Plunge 4.28% as Acquisition and Split Spark Debt Strategy Concerns

Shares of Keurig Dr Pepper (KDP) plunged to a record low on September 22, 2025, with an intraday decline of 4.39%. The stock has now fallen 4.28% in a single session, marking a three-day losing streak with a cumulative drop of 4.81%. The selloff reflects mounting investor concerns over the company’s strategic and financial trajectory.

The recent turmoil stems from KDP’s $18.4 billion cash acquisition of Dutch coffee giant JDE Peet’s, a deal financed through a bridge loan and executed at a 33% premium to JDE’s stock price. Analysts and investors have raised alarms about the acquisition’s cost and its implications for KDP’s debt load. The move has triggered a wave of downgrades from key institutions, including BNP Paribas Exane, Piper Sandler, and UBS, all of which reduced price targets and signaled doubts about the strategic value of the transaction.

Market skepticism is compounded by KDP’s plan to split into two publicly traded entities: one focused on global coffee and the other on North American beverages. While the restructuring aims to address the underperformance of the coffee segment since the 2018 merger with Dr Pepper Snapple, the complexity of the separation has introduced uncertainty. Critics argue the split may incur significant transition costs and operational challenges, undermining the anticipated cost synergies of $400 million annually.

Financial metrics further amplify concerns. KDP’s current ratio of 0.64 and quick ratio of 0.4 highlight liquidity risks, while a debt-to-equity ratio of 0.71 and an Altman Z-Score of 1.28 suggest heightened financial vulnerability. The stock has lost 18.1% year-to-date and trades 31.6% below its 52-week high, reflecting eroded confidence in the company’s ability to manage leverage and deliver growth in a high-interest-rate environment.

Despite the near-term pessimism, some analysts argue the market’s reaction may be overdone. The acquisition could unlock long-term value through expanded coffee distribution and operational efficiencies, particularly as KDP leverages JDE Peet’s expertise. Institutional buyers have begun accumulating shares at the dip, hinting at potential undervaluation. However, the success of the strategy hinges on KDP’s ability to execute the split smoothly, control debt, and prove the coffee segment’s profitability. Investors are advised to monitor key milestones, including the acquisition’s closure and the separation of the two entities, which could reshape KDP’s market position in the coming year.