Keurig Dr Pepper is a strong sell despite the strong performance
- Keurig Dr Pepper has been on a strong long-term upward trend in price leading to the valuation of $38.
- Investors should sell the counter, expecting downward pressure from the war in Ukraine.
- Strong fundamentals may not protect the share price from the developing geopolitical risk.
Keurig Dr Pepper Inc. (NASDAQ:KDP) announced Q4 and annual results, which indicate strong performance. The company reported 8.7% growth in Q4 net sales and 9.2% annual growth. The diluted EPS for the year shot up by 61.3% to $1.50.
KDP attributes the strong performance to its now complete three-year strategy on mergers. Thanks to the strategy, KDP now prides itself in a 75% market share growth in the cold beverages retail business.
KDP is among a few US stocks that have remained defiantly strong in the markets despite the growling bear market. In the premarket period after the announcement of results, KDP share price was at $38.06.
With the good results, the expectation is that there would be a surge in demand, and the share price would accelerate. However, the market is also opening to another reality as Russia bombards Ukraine from all corners. Investors would therefore be better off taking extra caution in their market activities.
KDP at the strongest market valuation of $38 and decliningCopy link to section
KDP remained bullish in the long-term trend and is currently trading at some of the highest prices. At a valuation of $38, the company is trading above all moving averages. This makes KDP a sell at the prices in response to the invasion of Ukraine by Russia.
The stock markets are expected to plummet to a bottomless pit in response to the crisis. The war worsened the bear markets that had already started. Investors should prepare to resume their positions at prices below $35 if the ongoing crisis continues.
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KDP reported strong performance with high single-digit growth in net sales. The company has strong fundamentals, which explains its high share price at $38. However, the war in Ukraine means that investors should sell at the current levels and wait for the price at the lower levels.