Citigroup Upgrades TreeHouse Foods to Buy

Analysts at Citigroup upgraded shares of TreeHouse Foods

to Buy on Monday morning with a price target of $61.00. Early in the trading session, the stock has climbed nearly 3 percent and was trading at $52.60. The analysts wrote that "We are upgrading TreeHouse to a Buy and raising our 2013 & beyond estimates due to the imminent launch of private label, K-cup coffee for use in the industry leading Keurig single-serve coffee brewers, as patents surrounding this product expire on September 16th." The firm's previous price target on the stock was $56.00. Its new 2013 EPS estimate for TreeHouse is $3.30, up $0.10. Citi believes that there will be strong demand for discounted K-Cups once Green Mountain Coffee Roasters'

patents expire. Branded K-Cups currently sell for $11.99 per box, which is a 20 percent premium to the expected $9.99 price for a box of TreeHouse K-cups. They also have a very favorable outlook for the K-cup segment as a whole. They wrote, "By our estimate, the single-serve K-cup coffee segment grew 60% over the last 9 months and has annual wholesale revenue of approximately $3.0 billion."