KeyBanc Sees Increased Likelikhood For Green Mountain, Coke Deal Following Kent Comments

Shares of Green Mountain Coffee Roasters GMCR are up more than 2 percent Tuesday morning on the heels of an earlier research note from KeyBanc's Akshay Jagdale. With about four hours left in the intraday trading session, the stock is around $73.43 at last check. Following some comments from Coca-Cola KO CEO Muhtar Kent at the Beverage Digest Conference on Monday, Jagdale believes a Green Mountain deal with Coca-Cola could be on the table if the maker of the Keurig can offer a quality cold-platform product. Kent called the single-serve dispensing line of products more of an opportunity than a threat, but seemed to suggest further innovation will be needed. Jagdale noted several "key technological hurdles" which Green Mountain's Keurig cold has overcame:

• "the beverage had to come out cold;
• preparation time had to be at or less than 60 seconds;
• carbonation had to be achieved without the use of a CO2 cylinder; and
• the system had to be capable of delivering a perfect dose for each beverage/brand."

The KeyBanc analyst maintains a Buy rating and $100 price target on shares of Green Mountain. Jagdale's price target implies potential upside of about 36 percent from where Green Mountain shares are currently trading.