Analysts Sound Off On Green Mountain Coffee Roasters

green mountain coffee

Green Mountain Coffee Roasters missed analyst expectations yesterday, sending the stock down nearly 40% today.

Revenue for the Keurig manufacturer grew 91%, to $711 million, but was below both company and Wall Street guidance of $750 to $760 million. That miss, coupled with an inventory surge, made last night’s conference call with analysts all the more important. Here’s a roundup from some of the analysts on the call:

KeyBanc’s Akshay Jagdale: Buy – $80 PT (lowered from $120) — There were four things GMCR needed to do to yesterday: 1) eliminate tail-risk by dismissing concerns regarding its capital expenditures plan; 2) beat and raise; 3) improve its financial disclosure; and 4) specifically address any other issues that were brought up in recent weeks by short sellers. We believe the Company delivered on three of the four topics; the obvious exception being that the Company missed its 4Q sales guidance (by $34 million or 4.5%).

Roth Capital Partners’s Anton Brenner: Buy – $120 PT — One obvious explanation is that the company pre-announced a K-Cup price increase during Q3 and some large chains probably built inventory prior to the raise. If so, this implies absolutely nothing regarding future sales trends, and the subsequent one-third decline in the share price offers an unusually attractive buying opportunity in our view.

Canaccord Genuity’s Scott Van Winkle: Buy – $120 PT — We expect several years of rapid growth, driven by rising penetration of Keurig single-cup coffee makers in coffee-drinking households that should drive higher revenue growth and even higher rates of earnings growth as the margin story unfolds.

Click here to take a read more about yesterday’s earnings >

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