Green Mountain (GMCR) Smells Like Burnt Coffee

July 16, 2012 2:54 PM EDT
Shares of Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR) are tapping new 52-week lows Monday as investors continue to respond to concerns raised by analysts about weak K-Cup sales.

On Friday, Stifel Nicolaus analyst Mark Astrachan noted that increased competition will pressure K-Cup pricing, increase promotional activity and result in share loss.

Green Mountain is already seeing more competition from private-label capsule makers before the K-Cup patents expire in September, the firm notes. In addition, retailers are increasing their promotions for K-Cups and this is even more plentiful at closeout retailers like Big Lots, the analyst notes.

Shares of GMCR last traded at $18.23, down 7.5 percent.

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