Keurig Green Mountain Added to the S&P 500

Companies and Brands

Published: March 16, 2014 10:14 am

Last Updated: April 28, 2020 12:28 am

After markets closed on Friday, Standard & Poors announced several changes in its indexes. The big news in the announcement was the addition of Keurig Green Mountain Inc. (NASDAQ: GMCR) to the S&P 500 Index effective after the close on March 21. Keurig replaces WPX Energy Inc. (NYSE: WPX). WPX will take Keurig’s place on the S&P MidCap 400 Index.

Getting added to the S&P 500 is always good news for a stock because there is so much demand for index funds. Keurig shares rose 2.45% to $116.03 in after-hours trading on Friday. The shares are likely to add even a bit more during Monday’s regular session. The shares were up

Keurig’s been on something of roll in the last six weeks. First there was the deal with The Coca-Cola Co. (NYSE: KO). The beverage giant will acquire 10% of Keurig and enter an exclusive partnership with the smaller company for the production and sale of branded Coke products in Keurig’s planned single-serve cold beverage dispenser.

On Friday, Keurig announced that it had killed its exclusive deal with Starbucks Corp. (NASDAQ: SBUX) for super-premium coffee packed in K-Cups. Keurig struck a new deal with Peet’s Coffee, a division of privately held Joh. A Benckiser, a German firm that also owns coffee companies D.E. Master Blenders 1753 and Caribou Coffee. The deal will put Peet’s-branded K-Cups in more than 12,000 U.S. stores.

When Keurig reported earnings results in early February, the company forecast sales growth in 2014 in the high single digits with more growth coming in the second half of the year. The company reached an all-time intraday high on February 20 at $124.42, and the current consensus price target on the stock is around $125.10, implying a potential gain of just 0.6%. That price target should go up some now that the company’s stock is included in the S&P 500.

Keurig’s shares closed at $113.25 on Friday, up 6.7% on the day. They’ve risen nearly 50% this year and have a 52-week range of $52.58 to $124.42.

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