KDP's recent peak comes amid historically low implied volatility, a bull signal in the past
Carbonated beverage giant Keurig Dr Pepper Inc (NASDAQ:KDP) is up 1.1% to trade at $39.54 at last glance, earlier hitting a record high of $39.67. The stock could see even more tailwinds ahead, however, according to data from Schaeffer's Senior Quantitative Analyst Rocky White. Specifically, this peak comes amid historically low implied volatility (IV) -- a combination that has been bullish for the stock in the past.
According to White's data, there were three other instances in the past five years when the stock was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th annual percentile or lower -- as is the case with the stock's current SVI of 18%, which sits in the 19th percentile of its 12-month range. KDP was positive one month later after each of these signals, averaging a return of 4.1%.
Up 7.3% year-to-date, a similar move would send the stock to another set of highs. The equity rose above several long-term moving averages at the end of June, including the 150-day trendline, and has potential support at the $38 level.
There is plenty of space for bull notes amongst analysts as well. Of the 10 in coverage, five still carry a tepid "hold" rating, with five a "buy" or better. Plus, the 12-month consensus price target of $40.89 is a slim 3.3% premium to current levels.