Stifel Nicolaus Maintains Sell on Green Mountain Coffee

Stifel Nicolaus reiterates its Sell rating on Green Mountain Coffee GMCR as concerns remain despite an earnings beat that alleviates concerns of slowing demand. Stifel Nicolaus says, "Near-term, we anticipate GMCR shares are likely to outperform as investors focus on strong brewer sales and a corresponding increase in K-Cup attachment rate. We nonetheless maintain our Sell rating but increase our fair value to $39 to reflect greater household penetration of brewers in our demand model. Longer-term, we continue to believe competition resulting from partner brands (Starbucks, Folgers, etc), the September 2012 patent expiration, and other Keurig-compatible pods (e.g., Rogers Family's OneCup) will negatively impact K-Cup profitability, distantly the most important earnings driver." GMCR closed at $53.63 a share yesterday.