Green Mountain Coffee Roasters, Inc (NASDAQ:GMCR) received a positive conviction from the analysts of Canaccord Genuity after the coffee roaster reported earnings results that beat the consensus expectations of Wall Street analysts for the fiscal third quarter.
Canaccord Genuity analysts Scott Van Winkle and Mark Sigal reiterated their Buy rating for shares of Green Mountain Coffee Roasters, Inc. (NASDAQ:GMCR) and raised the price target from $73 to $89 per share. The stock price of the company previously closed at $79.30 per share yesterday. The stock retreated and opened at around $73.50, but managed to regain its value and began trading around $78 to $79 per share in the afternoon trading on Thursday, in New York.
Green Mountain Coffee Roasters, Inc. (NASDAQ:GMCR)n expected to deliver strong earnings and revenue for years
In a research note to investors, Winkle and Sigal said that Green Mountain Coffee Roasters, Inc (NASDAQ:GMCR) is expected to deliver strong earnings and revenue growth over the next several years. They emphasized that the primary growth driver for the coffee roaster is the rising penetration of Keurig-single cup coffee makers in North America.
The analysts reported that Green Mountain Coffee Roasters, Inc (NASDAQ:GMCR) posted higher earnings per share (EPS) but lower than expected revenue for its fiscal third quarter, and its guidance was in line with their expectations. The coffee roaster generated $0.82 EPS and $967.1 million compared with its $0.52 EPS and $869.2 million revenue in the same period in the previous year. The company’s long-term revenue guidance was 15% to 20%. They expect the company’s guidance for 2014 will be in line, which will be released in the fourth quarter.
Green Mountain Coffee Roasters, Inc. (NASDAQ:GMCR) to announce new details in September
Winkle and Sigal noted that the metrics of Green Mountain Coffee Roasters, Inc. (NASDAQ:GMCR) meet expectations. During the upcoming September analysts’ day, management will reveal details about significant takeaways such as the deployment of interactions packs, new partner discussions and beverage systems.
Aside from raising their price target for shares of GMCR, the analysts also increased their EPS estimate for the full year 2013 from $3.15 per share to $3.19 per share based on its positive earnings for the third quarter. They also raised their fiscal 2014 EPS estimate for the stock to $3.64 per share from $3.49 on higher gross margin.
The analysts explained that their valuation is at 21x C2014E EPS and 10x the EBITDA estimate. According to them, “the valuation has expanded consistent with staple peers.”