Analysts Cautious on Treehouse (THS) K-Cup Business
Treehouse (NYSE: THS) started shipping private label (PL) single serve coffee at end September and management is optimistic about the new product.
Commenting on the developments, analyst Thilo Wrede of Jefferies said "We believe there is a meaningful volume opportunity for THS as retailers seem eager to sell PL versions of the popular K-cup product."
"However, we also assume for now that competition in the category will be fierce, as branded leader Green Mountain Coffee (Nasdaq: GMCR) seems intent on defending its dominant share & therefore the profit contribution might be muted for now," said Wrede.
Wrede thinks there is a lack of visibility on coffee and is reluctant to place a Buy rating on the stock due to unpredictability.
Threehouse recently reported earnings that missed estimates. On a follow up conference call, management said they were optimistic about M&A outlook.
Jefferies maintained a Hold rating on TreeHouse Foods and raised its price target to $56.00 (from $55.00).
For an analyst ratings summary and ratings history on TreeHouse Foods click here. For more ratings news on TreeHouse Foods click here.
Shares of TreeHouse Foods closed at $53.15 yesterday, with a 52 week range of $46.15-$67.25.
Commenting on the developments, analyst Thilo Wrede of Jefferies said "We believe there is a meaningful volume opportunity for THS as retailers seem eager to sell PL versions of the popular K-cup product."
"However, we also assume for now that competition in the category will be fierce, as branded leader Green Mountain Coffee (Nasdaq: GMCR) seems intent on defending its dominant share & therefore the profit contribution might be muted for now," said Wrede.
Wrede thinks there is a lack of visibility on coffee and is reluctant to place a Buy rating on the stock due to unpredictability.
Threehouse recently reported earnings that missed estimates. On a follow up conference call, management said they were optimistic about M&A outlook.
Jefferies maintained a Hold rating on TreeHouse Foods and raised its price target to $56.00 (from $55.00).
For an analyst ratings summary and ratings history on TreeHouse Foods click here. For more ratings news on TreeHouse Foods click here.
Shares of TreeHouse Foods closed at $53.15 yesterday, with a 52 week range of $46.15-$67.25.