- Keurig Green Mountain (GMCR -3.6%) is slammed after SunTrust cut its stock price target to $70 from $95, citing a loss of market share to the likes of Kraft Heinz (NASDAQ:KHC), JM Smucker (NYSE:SJM) and Starbuck (NASDAQ:SBUX).
- The firm thinks GMCR will need to address share losses for its company-owned brands sooner rather than later, which will pressure earnings; market share for GMCR-owned brands have dropped to 28% from 35% over the past year and posted a 5% sales decline and 12% volume decline in the most recent four-week period, according to Nielsen, lost to GMCR’s licensed partners which have stronger brands and are promoting their products more than GMCR.
- SunTrust says it does not believe GMCR wants simply to be a contract manufacturer for the industry; GMCR will need to step up promotions in the coming months while working through its higher-cost coffee hedges, which the firm cites as the key reason behind its FY 2015 earnings reduction.