KDP Stock Pops on Quarterly Report

Several analysts raised their price targets in response

Deputy Editor
Apr 28, 2020 at 12:27 PM
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Keurig Dr Pepper Inc (NYSE:KDP) is up 6.5% to trade at $27.54, at last check, bouncing off a positive first-quarter report. The beverage name posted earnings of 29 cents per share and revenue of $2.61 billion, higher than Wall Street's estimates of 27 cents per share and $2.55 billion in revenue. Following the news, three analysts raised their price targets, including Citigroup to $31 from $28. 

Though short interest on KDP is down 6.73% in the last two reporting periods, the 32.57 million shares sold short still account for a healthy 10.9% of the stock's available float, or eight days worth of pent-up buying power, leaving plenty of room for a short squeeze to propel the stock higher. 

While calls still outweigh puts overall, these bearish bets are gaining popularity. This is per KDP's 50-day call/put volume ratio of 0.75 at the International Securites Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 98th percentile of its annual range. 

Echoing this, KDP's Schaeffer's put/call open interest ratio (SOIR) of 0.89 sits higher than 95% of all other readings from the past year, suggesting short-term options players have rarely been more put-biased in the last 12 months.

Today's KDP's options pits are bursting with activity. So far, 1,664 calls and 1,592 puts have exchanged hands, which is seven times the intraday average. The most popular position by far is the May 28 put, where positions are being opened. 


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