Concerned About The Keuring Kold Launch? Here's What Investors Should Know

In a report published Monday, Longbow Research analyst Alton Stump maintained a Neutral rating on

, expressing concerns related to the upcoming Keurig Kold launch scheduled for this fall. "While we have a plethora of worries heading into the upcoming launch of the Keurig Kold system, our skeptical view is heightened by the sharp premium price point GMCR plans to charge for its Kold pods and brewers," analyst Alton Stump said. Keurig Green announced it plans in May to sell its Kold pods for $0.99-$1.29 and the soda makers at $300+. This represents a substantial premium to most of the available alternatives, such as a can of soda priced at around $0.40 per serving and the price points for soda makers under $150 at retail. While noting that Keurig Green has historically "struggled to gain traction" selling higher priced hot-drink brewers, Stump added that May's announcement "will not bode well for the even higher priced Keurig Kold." Moreover, the company has increased its presence in the mass retail and club channel over the past 3-5 years, "where high ticket items are generally far slower moving in comparison to higher end retail outlets." The EPS estimate for FY16 has been reduced by $0.08 to $4.11 to reflect the exclusion of any accretion from Keurig Kold.