KeyBanc Lifts Target on Green Mountain (GMCR) Following "Impressive" Q4 Report

November 28, 2012 7:55 AM EST
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Price: $91.67 --0%

Rating Summary:
    6 Buy, 18 Hold, 3 Sell

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    Up: 5 | Down: 5 | New: 0
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KeyBanc raised its price target on Buy-rated Green Mountain Coffee Roasters (NASDAQ: GMCR) from $36 to $45 following strong Q4 results after the close.

The firm comments, "Green Mountain Coffee Roasters, Inc.'s (GMCR-NASDAQ) 4Q12 was an impressive one, in our view - the Company: 1) beat our estimates on sales (by 8%) and EPS (by 32%); 2) reduced K-cup inventories substantially (down 30% year-over- year); 3) aggressively bought back shares (roughly 3 million shares before the end of 4Q12 and another roughly 4.3 million shares following the close of 4Q12); 4) increased FY13 EPS guidance; and 5) expressed increased confidence in its recently issued long-term sales and EPS growth guidance. We are encouraged by the fact that management's confidence in delivering its long- term growth algorithm has increased over the 3-month period following the expiration of two of its key patents (expired on September 16, 2012) - this is supportive of our positive stance.

Furthermore, for the first time, management clearly stated that all of its most significant partner brand contracts (such as SBUX, DNKN, and SJM) are multi-year in nature even from this point in time (i.e., not expiring this year)."

KeyBanc raised FY13 EPS estimate from $2.60 to $2.69 (consensus was at $2.49 prior to earnings).

For an analyst ratings summary and ratings history on Green Mountain Coffee Roasters click here. For more ratings news on Green Mountain Coffee Roasters click here.

Shares of Green Mountain Coffee Roasters closed at $28.95 yesterday.

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