Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) continues to benefit from a positive read from Canaccord Genuity on Wednesday, where it was called “A twinkle in his eye?” in the continued morning notes about Consumer Products Analyst Scott Van Winkle.
The report updated holiday sales for Green Mountain’s Keurig, noting that early season sales appear stronger than those of prior years despite no real price promotion. In years past, sales built throughout the holidays, and there is ample inventory this year.
The report also goes on to note that shelf space is up 30% to 50% from a year ago and the only new competition is CBTL at Bed, Bath & Beyond (NASDAQ: BBBY). Shelf space was called “down for Tassimo, but up for Dolce Gusto.”
Mr. Coffee and Cuisinart advertising spending is higher than expected and should drive incremental share of third-party brewers this year, which is said to be favorable to margins.
Starbucks Corporation (NASDAQ: SBUX) is now fully distributed in Bed, Bath & Beyond and Macy’s Inc. (NYSE: M) and is reportedly aiding consumer interest. Brewer sales at Dunkin’ Brands Group, Inc. (NASDAQ: DNKN) stores are said to be running over double Van Winkle’s one-per-week estimate at two to three per week in his checks.
The end note, “Van Winkle remains bullish on Green Mountain, expecting 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.”
In the call, Van Winkle reiterated a Buy rating with a $94 price target for Green Mountain. The stock rose handily with the market on Wednesday for a 7.1% gain and the stock continues to benefit the day after as the gain is up 5% at $55.08 so far today.
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