With Kraft-Starbucks Relatiohship Damaged, Starbucks Could Look to Green Mountain Coffee (GMCR)

Shares of Green Mountain Coffee (Nasdaq: GMCR) are moving higher today on speculation of a deal with Starbucks (Nasdaq: SBUX), after Starbucks announced it plans to end its distribution relationship with Kraft (NYSE: KFT) for packaged coffees.

With the Starbucks-Kraft relationship damaged, and with the single-cup
coffee too significant for Starbucks to ignore, a deal with Green Mountain Coffee makes sense, according to analyst Scott Van Winkle of Canaccord Genuity

"If Starbucks searches for a non-Via single-cup platform, Keurig could be the
solution. We would view a Starbucks deal for GMCR as a material positive as
cannibalization would likely be more than offset by expanded penetration," Van Winkle stated.

The firm has a Buy rating and $40 price target on GMCR.

Shares of GMCR are up 1.8% today to $34.49.

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