Keurig Dr Pepper (KDP) is expected to post a "quiet" quarter and show steady growth in US refreshment beverages during Q4 while facing ongoing challenges in its coffee segment, RBC Capital Markets said in a note Friday.

The company may fall short of its ambitious topline growth target this year, a risk already factored into current estimates, the investment firm said.

For 2025, management is likely to maintain guidance similar to last quarter, with gains from refreshment drinks and the GHOST acquisition, despite weak coffee sales, RBC said.

Coffee sentiment remains negative because of rising commodity costs, but KDP's valuation is already higher than usual compared to peers, RBC analysts noted.

Despite current coffee challenges, RBC analysts highlighted the company's strong carbonated soft drink portfolio, growing international business, robust innovation pipeline, and an existing base of coffee brewers that could support future growth.

External challenges include potential FX headwinds, political uncertainties affecting trade, and inflation pressures, especially in the coffee sector, according to the note.

RBC maintained an outperform rating for Keurig Dr Pepper with a $42 price target.

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