Green Mountain Coffee Forecast: Not Decaf

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David Evanson and Scott Van Winkle, Fall, 2011

Canaccord Genuity analyst Scott Van Winkle released a Q4 preview where he reiterated his Green Mountain Coffee BUY rating and $120 price target. Mr. Van Winkle said:

“We expect 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.”

According to a survey by the National Coffee Association, 81% of consumers surveyed responded with a favorable impression of single-serve coffee, and purchase intent is rising.

Regarding the fourth quarter, Mr. Van Winkle’s forecast is as follows:

-Revenue of $753.7M, up 102% from $373.1M last year.
-EPS of $0.48 excluding amortization, up from $0.24 last year.
-Brewer shipment growth in units to 1.8M vs. 1.2M in Q4 last year.

He added, “Dunkin’ (DNKN) advertising support is the unappreciated asset and Starbucks’ (SBUX) “on-time” launch should add to holiday momentum.”