Janney Montgomery Scott Says Green Mountain's Silence Has Been 'Deafening'; Strongly Recommends Buying the Stock
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Price: $91.67 --0%
Rating Summary:
5 Buy, 15 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 12 | New: 50
Rating Summary:
5 Buy, 15 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 12 | New: 50
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Janney Montgomery Scott reiterated their Buy rating on Green Mountain Coffee Roasters (NASDAQ: GMCR) following yesterdays' sell-off after a memo from Starbucks (NASDAQ: SBUX) CEO Schultz, which hints that the coffee giant may not partner with Green Mountain in the single-serve market.
Commenting on the unfolding situation, the firm notes that with all the noise over the last week, Green Mountain has been silent. "We believe the silence merely reflects where the leverage lies, and Green Mountain's confidence in its ability to grow the Keurig platform on its own," said analyst Mitchell Pinheiro.
Pinheiro said while it is hard to handicap the eventual outcome, they view this as a "Win-Don't Lose" proposition for Green Mountain. The firm's FY12 EPS estimate of $2.08 would be unaffected without Starbucks K-Cups, and attainable if Starbucks emerges as a competitor. Pinheiro notes earnings are largely driven by the installed base.
"Given the continued growth of the installed base and expanded margins in FY13, we expect EPS to increase in excess of 50% with upside dependent on the investment spending it may need to support the Next-Generation brewer."
While the stock action will be dominated by the noise around Starbucks, the firm continues to believe the stock will reach the $50/share level by September and $62/share in twelve months.
"We strongly recommend purchase of Green Mountain, and would be aggressive buyers on dips related to Starbucks chatter."
For more ratings news on Green Mountain Coffee Roasters click here and for the rating history of Green Mountain Coffee Roasters click here.
Shares of Green Mountain Coffee Roasters closed at $40.71 yesterday.
Commenting on the unfolding situation, the firm notes that with all the noise over the last week, Green Mountain has been silent. "We believe the silence merely reflects where the leverage lies, and Green Mountain's confidence in its ability to grow the Keurig platform on its own," said analyst Mitchell Pinheiro.
Pinheiro said while it is hard to handicap the eventual outcome, they view this as a "Win-Don't Lose" proposition for Green Mountain. The firm's FY12 EPS estimate of $2.08 would be unaffected without Starbucks K-Cups, and attainable if Starbucks emerges as a competitor. Pinheiro notes earnings are largely driven by the installed base.
"Given the continued growth of the installed base and expanded margins in FY13, we expect EPS to increase in excess of 50% with upside dependent on the investment spending it may need to support the Next-Generation brewer."
While the stock action will be dominated by the noise around Starbucks, the firm continues to believe the stock will reach the $50/share level by September and $62/share in twelve months.
"We strongly recommend purchase of Green Mountain, and would be aggressive buyers on dips related to Starbucks chatter."
For more ratings news on Green Mountain Coffee Roasters click here and for the rating history of Green Mountain Coffee Roasters click here.
Shares of Green Mountain Coffee Roasters closed at $40.71 yesterday.
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