Today, I recommend selling Keurig Dr. Pepper (KDP). The stock is close to my $37 target, and at 21X 2022 earnings per share (EPS), the stock no longer fits the typical profile of a Value Authority stock. The likelihood of slower volume growth and higher interest rates will further limit KDP’s stock price gains. Sell KDP.
At the same time, I am recommending that you purchase shares in networking company Juniper Networks (JNPR). I believe the company is at the start of a turnaround as it introduces artificial intelligence to the field of networking. Customers have, thus far, responded positively to this development. At 14X next year’s EPS estimates, the stock is cheap. Buy JNPR under $28. My target is $32. I will have more details in tomorrow’s Value Authority issue.
If you are an Inner Circle subscriber who is following the Model Portfolio, sell KDP and buy JNPR with a 5% allocation to the Value Sector.