Canaccord Genuity analyst Scott Van Winkle weighed in today on Green Mountain Coffee Roasters (NASDAQ:GMCR), following the company’s fiscal first-quarter results, posting EPS of $0.88 that was in line with Canaccord’s forecast despite a 8% top-line miss versus Canaccord’s estimate on brewer sales.
The analyst reiterated a Buy rating on the stock, but reduced the price target to $139 (from $168), which still represents a potential upside of 26% from where the stock is currently trading.
Winkle noted, “Despite a slower debut for the Keurig 2.0 brewer, Keurig’s dominance of the market for home coffee brewers and its recovering K-cup market share is unchanged. We expect household brewer penetration to continue to grow meaningfully and the upcoming Keurig Cold launch to provide an incremental catalyst. We view the apparent confidence void after a softer-than-expected holiday selling period as a significant buying opportunity.”
Furthermore the analyst wrote, “Keurig Cold will be formally introduced at a May investor event, seemingly rather than viewable at the March Housewares show in Chicago. 30 varieties across 16 brands are expected at the time of this fall’s launch. We continue to view as a catalyst for the shares, but have only modest assumptions embedded in our forecasts at this point.”
Keurig Green Mountain, Inc. produces and sells specialty coffee, coffeemakers, teas, and other beverages in the United States and Canada.