Back to top

Analyst Blog

Coffee company, Green Mountain Coffee Roasters, Inc. (GMCR - Analyst Report) recently announced a deal with beverage company Dr Pepper Snapple Group (DPS - Analyst Report), by virtue of which the latter’s ready-to-drink iced tea, Snapple, can be made on the former’s Keurig single cup brewing systems.

The Snapple iced teas will be available in Green Mountain’s K-Cup and Vue packs, which can be prepared on its Keurig brewers. The Snapple K-Cup packs will be available across U.S. and Canada starting the spring of next year. Soon thereafter, the Vue packs are scheduled to hit the markets.

Early this month, Green Mountain launched its new Keurig Vue coffee brewer model – Keurig Vue V600, at a discounted price. Green Mountain, which was until now enjoying a dominating position in the U.S. market with its innovative Keurig Single Cup brewing technology, is facing increased competition from rivals like Starbucks Corporation’s (SBUX - Analyst Report) latest premium single cup domestic coffee machine, Verismo. The machine is available at the company’s website, Verismo.com, and is expected to be available in company stores and at certain specialty retailers from this month. Verismo has increased the competition for Keurig, as a Verismo coffee machine is priced at a much lower level from the high-priced Keurig brand. Lower-priced models like Vue V600 and the Snapple deal are aimed to protect from losing share to Verismo in future.

Our Recommendation

Green Mountain holds a Zacks #4 Rank, which implies a short-term Sell rating. On a long-term basis too, we have an Underperform recommendation on the stock due to competitive pressures from Verismo.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
FELCOR LODG… FCH 10.47 +3.46%
OLD DOMINIO… ODFL 63.48 +1.18%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
LENOVO GROU… LNVGY 27.07 +0.04%