Keurig Dr Pepper’s updated CEO succession plan should leave investors feeling comfortable, according to analysts at Barclays.
KDP told shareholders on Wednesday that Tim Cofer will be joining the company in November as its chief operating officer before transitioning into the CEO role in the second quarter of 2024.
The analysts highlighted that this arrangement reinforced the care taken by KDP to support a collaborative transition.
Post-transition, current CEO Bob Gamgort will transition to the role of executive chairman for an unspecified period, which the analysts noted allowed for flexibility.
“Earlier this month, Gamgort said that he intended to remain involved with KDP for a long time, so today’s announcement will surely be taken in stride and with the real headline being around Mr. Cofer, a strong & well-tenured consumer packaged goods (CPG) executive joining the team,” the analysts wrote in a note to clients.
The analysts wrote that Cofer’s experience strikes them as being aligned well with KDP’s needs as it looks to its next phase of growth, five years post-merger.
Most relevant was his experience time spent at Kraft and Mondelez (NASDAQ:MDLZ), they said.
“In these roles, he has experience with both organic and inorganic growth initiatives having overseen the integration of Cadbury into Kraft, and enterprise-wide strategic perspective from his time as Mondelez (NASDAQ:MDLZ)’s chief growth officer, Mr. Cofer oversaw the execution of the company’s growth strategy across a wide range of regions,” they wrote.
They also noted Cofer’s experience with direct store delivery (DSD) systems, particularly a refrigerated DSD system, as intriguing to think about in the context of KDP’s push into ready-to-drink coffee with La Colombe.
They concluded: “All told, we view the appointment as a natural fit, with Mr. Cofer’s extensive time spent in CPG laying a highly relevant foundation from which to lead KDP forward.”
As such, the analysts awarded the stock an ‘Overweight’ rating and US$40 price target, representing an 18.4% upside to KDP’s share price at the time of writing of US$33.77.
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