An Unlikely & Indirect Analyst Defense of Green Mountain (GMCR, SBUX, WMT, TGT)

If you have been watching shares of Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR), you would know that the high-flyer has fallen from grace.  After a prominent short seller became vocal against the company, it destroyed much of the gains that have been made over the last year.  Now there is a new analyst call, not even directly on Green Mountain, that may be offering some defense for the stock.

Starbucks Corporation (NASDAQ: SBUX) was the highlight of a mere “Neutral” rating call by Zacks this morning after the Starbucks earnings report.  Green Mountain relies almost entirely on the domestic market but Starbucks is focusing on international growth.

The new agreement between Green Mountain and Starbucks was noted as offering coffee in K cups across food, drug, mass, special and department stores in the U.S. Zacks further noted. “Management has also revealed that the K cups will be available in retail outlets like Wal-Mart Stores Inc. (NYSE: WMT) and Target Corporation (NYSE: TGT).”

This is one of those calls where it was the inference that makes more of a difference than the original intent of the call, but there is just one problem in saying that Target and Wal-Mart for K-cup sales would be a boost for Green Mountain… If you go online to the Wal-Mart and Target websites they both already offer K-Cup products.  Is this an “expanded” move that was being hinted at or is this something different?  Some Target stores also already have actual Starbucks stores at the entrance as is.

Green Mountain shares are up 2.4% at $68.50 and Starbucks shares hit a new 52-week high of $44.23 this morning.  Currently, Starbucks shares are up 6.3% at $43.99.

JON C. OGG