In a research report sent to investors yesterday, Roth Capital analyst Anton Brenner reiterated a Neutral rating on shares of Keurig Green Mountain Inc (NASDAQ:GMCR), while slashing the price target to $58 (from $100), on the back of unattractive short-term outlook and skepticism as to the ability to achieve longer-term sustained double-digit revenue and 15% EPS growth limit the upside potential for the stock.
Brenner commented, “The short-term outlook is clouded. Slower brewer installed base growth, aggressive competitive pricing in pods, increased competitive activity in away from home pods, and a shift in product mix to private labels have impacted revenues and reduced profit margins and should continue to impact results at least through F2016. Although the Keurig 2.0 interactive technology was intended to reduce the share of unlicensed competitive products, the opposite has occurred, as Keurig’s owned and licensed share in fact is decreasing.”
To the stock’s credit, the analyst believes that the valuation seems reasonably attractive following the recent sharp price decline.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Anton Brenner has a total average return of 5.6% and a 48.8% success rate. Brenner has a 56.9% average return when recommending GMCR, and is ranked #988 out of 3734 analysts.
Out of the 16 analysts polled by TipRanks, 6 rate Green Mountain Coffee Roasters stock a Buy, 9 rate the stock a Hold and 1 recommends Sell. With a return potential of 167.5%, the stock’s consensus target price stands at $134.89.