Analyst Worried About Increasing Competition for Green Mountain's (GMCR) K-Cups

Shares of Green Mountain (Nasdaq: GMCR) will likely be under pressure Wednesday as a Stifel Nicolaus analyst issued a warning shot on increasing competition in the K-Cup market.

The firm's Mark Astrachan cited recent channel checks which suggest several concerning developments.

• Rogers Family San Francisco Bay OneCups took up "material" shelf space in several grocery stores and Costcos (Nasdaq: COST) on the west coast. Astrachan said distribution could soon expand across the nation.
  
• Private label Keurig-compatible brewers at Safeway (NYSE: SWY) and Ingles Market were found, indicating retailers are becoming more open to non-Green Mountain brands.
  
• Numerous Big Lots (NYSE: BIG) stores had several best-selling K-Cup stock keeping units at a 25 percent discount compared to normal retail prices.
  
• Scanner data from Symphony IRI showed K-Cup sales growth decelerated by 49 percent over the second quarter.

Stifel Nicolaus maintains a Sell rating and $35 price target on shares of Green Mountain.

With the stock down about 1.9 percent to $44.53 at last check, the firm's price target implies potential downside of about 21 percent.

Visit our Analyst Ratings page to track all the market-moving analyst action on shares of Green Mountain.

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