Janney Says Green Mountain (GMCR) Patent Fears Overdone; Maintains Buy
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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: 5 | New: 26
Rating Summary:
5 Buy, 15 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Janney Capital's Mitch Pinheiro is defending Green Mountain Coffee Roasters (Nasdaq: GMCR) Thursday amid a more than 18 percent decline in the stock since mid-September.
The analyst calls the recent move lower "hard to explain." While Pinheiro contends the downside is related to patent expiration fears, he notes "the patent issue is not new and very well known by investors." Unless an out-of-court settlement is announced, Pinheiro expects "little news until the jury trial" scheduled for October 1st of 2012.
"While the patent expiration will be the primary tension in the stock over the next 12 months, we are not concerned with the potential for market share erosion in FY12 or FY13 and believe GMCR’s growth rate will be largely unaffected by private
label K-Cups," the Janney analyst said.
Pinheiro believes Janney's FY12 EPS estimate of $2.60 could ultimately be conservative given "the significant pullback in green coffee costs that could add at least $0.20/sh to 2H12 earnings."
Janney maintains a Buy rating and $125 fair value estimate on Green Mountain shares.
The analyst calls the recent move lower "hard to explain." While Pinheiro contends the downside is related to patent expiration fears, he notes "the patent issue is not new and very well known by investors." Unless an out-of-court settlement is announced, Pinheiro expects "little news until the jury trial" scheduled for October 1st of 2012.
"While the patent expiration will be the primary tension in the stock over the next 12 months, we are not concerned with the potential for market share erosion in FY12 or FY13 and believe GMCR’s growth rate will be largely unaffected by private
label K-Cups," the Janney analyst said.
Pinheiro believes Janney's FY12 EPS estimate of $2.60 could ultimately be conservative given "the significant pullback in green coffee costs that could add at least $0.20/sh to 2H12 earnings."
Janney maintains a Buy rating and $125 fair value estimate on Green Mountain shares.
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