Analysts at Longbow Research downgraded their stock rating for Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) from Buy to Neutral. The analysts explained that the downgrade was due to valuation, increased spending, and limited details regarding its plans for Keurig Cold as well as the time frame for its wide rollout in 2015.
Green Mountain partners with Coca-Cola
Last week, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) announced its global strategic partnership with The Coca-Cola Company (NYSE:KO) to develop and introduce the global brand portfolio of the beverage giant in the upcoming Keurig Cold at-home beverage system of the coffee company.
As part of the agreement, The Coca-Cola Company (NYSE:KO) takes a 10% minority stake or 16,684,139 shares of Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) for $74.88 per share or $1.25 billion.
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The stock price of Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) surged more than 45% after hours following the announcement of the agreement. The stock is currently trading around $117.56 per share, down by 1.47% at the time of this writing, 11:44 AM in New York.
Analysts’ ratings after Coca-Cola agreement
Analysts at Zacks maintained their Outperform rating with a $123 price target for the shares of Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) after the coffee company announced its agreement with The Coca-Cola Company (NYSE:KO).
Analysts at Bank of America maintained their Neutral rating for the stock, but raised their price target from $87 to $108 per share on February 7.
On the other hand, analysts at Williams Capital issued a Buy rating for the stock of the coffee company and raised their price target from $106 to $125 per share.
Green Mountain faces anti-competitive lawsuit
Yesterday, TreeHouse Foods Inc. (NYSE:THS) filed a lawsuit against Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) for allegedly attempting to illegally monopolize the sale of pods used in its Keurig 2.0 coffee brewer that will be released later this year.
According to TreeHouse Foods Inc. (NYSE:THS), Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) implemented an anti-competitive lock-out technology on Keurig 2.0 to prevent it from functioning using other cups from unlicensed competitors. TreeHouse argued that the strategy eliminates consumer choice and compels them to buy higher priced K-cups from Green Mountain.