Buckingham Notes Strong K-Cup Growth, Reiterates Buy on Green Mountain

On Monday, The Buckingham Research Group analyst Mathew DiFrisco reiterated a Buy rating on

and a $133.00 price target. DiFrisco commented that he expects sales momentum for Green Mountain's Single Serve Cups to continue into February. Buckingham Research Group estimates that K-Cup packs and Dollar Sales to grow 12 percent and eight percent, respectively, in the second quarter of 2014. The analyst added that the cold weather has aided in home coffee consumption. Buckingham Research noted, "GMCR's dollar sales expanded 13.4% in January period vs 17.4% in December, with company brands sales growth of 7.5% vs. 11.5%, and licensed brands sales growth of 18.9% vs 23.1% in January and December, respectively. We estimated GMCR's market share declined slightly to 77.3% of the category in January from 78.4% in December. 3 month average growth remains encouraging in the double-digit range. GMCR's market share is expected to stabilize as the introduction of Kraft's unlicensed brands are lapped ahead. We expect double digit dollar growth in GMCR's company/licensed single serve brands given consistent sell-thru of its brewers, the increased household footprint as well as expanding SKUs and relationships." Shares of Green Mountain closed at $123.04 on Friday. Green Mountain is currently trading down 1.02% at $121.78.