Updates For BMC, China DangDang, Jack in the Box And Green Mountain Coffee

by: David Ristau

Earnings season is under way, and we are continuing to update price targets, buy/sell ratings, etc., for companies that we currently cover. Today, we have updated several companies. They include BMC Software (NASDAQ:BMC), E-Commerce China DangDang (NYSE:DANG), Jack in the Box (NASDAQ:JACK) and Green Mountain Coffee Roasters (NASDAQ:GMCR).

The chart below shows new ratings, price targets and buy/sell ranges versus old ones:

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BMC – Maintain At Buy, Decrease PT From $64.50 To $58.50

BMC Software is maintained as a buy for us despite a decrease in our overall price target. The company is operating with a P/E of 14 as well as a future P/E at 10. The company is operating at a very cheap multiple right now, and we think they have a lot of upside. The company's latest quarter showed a reduction in estimates for 2012, but we still believe this company is very cheap given even a lowered outlook for 2012. This is a great company with low debt levels, tons of excess cash, and upside in the cloud networking.

DANG – Maintain At Buy, Decrease PT From $13 To $9.50

China Dangdang is the eBay of China. The company is operating at a loss currently, but we believe E-Commerce DangDang is a great upside play in China. The company is growing with China, and they have great upside moving forward. The company is seeing revenue growing at 50% with active customers growing 36% as well. While the company has a number of issues with costs and debt, they are a great speculation play moving forward from here. We see them being able to move to profitability in 2013 with a flat year next year. Hold off on buying until they show consistency over $5.

GMCR – Increase From Buy To Hold, Decrease PT From $99 To $70

Green Mountain Coffee Roasters has been decimated after the latest quarter. The company got slashed by investors and analysts after a disappointing quarter with sales underperforming. Our estimates for GMCR are very conservative, and we do believe this company is worth around $70 per share. The latest drawback was over-extended. The stock is heavily traded, and with its high growth rate, disappointment in growth can hurt this company. We dropped our PT mostly because our model for discounting changed since the growth rate is no longer viewed as stable as it was prior, and future cash flow needs to be discounted at a higher level. Even with that said, this stock is undervalued. The future P/E is now less than 14. We are also excited about the opportunity Starbucks (NASDAQ:SBUX) and Dunkin' Brands (NASDAQ:DNKN) present with royalties, but we are not sure about how this impacts the coffee business for Green Mountain products.

JACK - Increase From Sell To Hold, Increase PT From $20 To $24.50

Jack in the Box may be starting to turn a corner. The company is still struggling with growth, but the company's plans to enfranchise their business is helping margins and profitability. We like Jack in the Box right now as a Hold instead of a sell. Until we can see better revenue growth YoY from the company, we do not see a ton of upside. The company, however, does have the Qdoba line that is doing very well and growing. They have done great with the refranchisement project, and it should continue to help.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.