Dougherty & Co Downgrades Peets Coffee & Tea (PEET) to Neutral; Valuation Call
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Price: $73.46 --0%
Rating Summary:
1 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Dougherty & Co downgraded Peets Coffee & Tea (NASDAQ: PEET) from Buy to Neutral, price target raised by $2 to $50.
Dougherty analyst says, "Retail channel sales are comping positively, which is driving overall margin performance, and PEET is actively expanding distribution within and outside of primary specialty coffee markets in channels that include mass merchant and shopping club stores. Line extension into medium-roast coffees should further leverage the DSD cost structure. Operating expense discipline remains strong and is protecting earnings amidst sigficant pressure from rising coffee costs. PEET is a very well run company with a strong management team and its execution amidst cost pressure has been impressive. We believe a single-serve offering is inevitable for PEET as this consumption model is perfectly positioned for Peet’s high price point. PEET shares are valued at 13x EV/2012E EBITDA based on our projected 2012 balance sheet. While we like PEET as a company and believe its has built a strong brand, we believe the equity value is aggressive, especially given our view for further cost inflation in 2012 and our belief that PEET is not a likely acquisition candidate."
"FY2011E earnings from $1.48 to $1.50; FY2011 revenues from $365.2 million to $373.5 million; FY2012E earnings from $1.79 to $1.80; FY2012 revenues from $395.1 million to $410.8 million."
For more ratings news on Peets Coffee & Tea click here and for the rating history of Peets Coffee & Tea click here.
Shares of Peets Coffee & Tea closed at $60.14 yesterday.
Dougherty analyst says, "Retail channel sales are comping positively, which is driving overall margin performance, and PEET is actively expanding distribution within and outside of primary specialty coffee markets in channels that include mass merchant and shopping club stores. Line extension into medium-roast coffees should further leverage the DSD cost structure. Operating expense discipline remains strong and is protecting earnings amidst sigficant pressure from rising coffee costs. PEET is a very well run company with a strong management team and its execution amidst cost pressure has been impressive. We believe a single-serve offering is inevitable for PEET as this consumption model is perfectly positioned for Peet’s high price point. PEET shares are valued at 13x EV/2012E EBITDA based on our projected 2012 balance sheet. While we like PEET as a company and believe its has built a strong brand, we believe the equity value is aggressive, especially given our view for further cost inflation in 2012 and our belief that PEET is not a likely acquisition candidate."
"FY2011E earnings from $1.48 to $1.50; FY2011 revenues from $365.2 million to $373.5 million; FY2012E earnings from $1.79 to $1.80; FY2012 revenues from $395.1 million to $410.8 million."
For more ratings news on Peets Coffee & Tea click here and for the rating history of Peets Coffee & Tea click here.
Shares of Peets Coffee & Tea closed at $60.14 yesterday.
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