Green Mountain Coffee: There Is Still A Lack Of Visibility On Long-Term Growth Drivers, Says Roth Capital
In a research report released Friday, Roth Capital analyst Anton Brenner reiterated a Neutral rating on Green Mountain Coffee (NASDAQ:GMCR) and raised his price target to $140 (from $120), which still represents a slight downside potential from current levels.
Brenner commented: “The greatest potential for accelerated growth in our view lies in international expansion as well as the launch of the Keurig Cold platform next year. However, neither of these efforts should contribute meaningfully to income over the next couple of years. Accordingly, with top-line growth and gross margins slowing over the short term, we continue to believe that at current levels the stock is more than adequately discounting the uncertain outlook.”
The analyst explained his new price target, “Our price target of $140 is based on the probability of a mid-teens long-term earnings growth rate and a forward P/E in excess of earnings growth given the potential for sustained double-digit earnings growth. The extensive product selection that Keurig offers with extensive lineup of brands and K-Cup alternatives, which should expand as new products and categories are introduced, should allow the company to maintain a dominant market share in single-serve coffee.”
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 9.4% and a 67.6% success rate. Brenner has a 56.9% average return when recommending GMCR, and is ranked #651 out of 3377 analysts.