The stock jumped $2.57, or 7.3%, to $37.72 in Tuesday's session following the news. Volume of 8.2 million, nearly double the issue's trailing three-month daily average of 4.5 million. The shares reached a 52-week high of $38.86 on Nov. 30, and at current levels, they're up about 29% year-to-date. Green Mountain shares jumped following the announcement of the restatement as the market fears of problems related to M.Block & Sons, the fulfillment vendor for most of the at-home orders of Green Mountain's Keurig business unit's single-cup business, proved unfounded. The total impact of the restatement was pegged at 4 to 5 cents a share in net income. Canaccord Genuity reiterated a buy rating and $40 price target on the stock on Tuesday, saying it's hopeful the quarter will be a good one. The current average estimate of analysts polled by Thomson Reuters is for earnings of 20 cents a share in the three months ended in Sept. 30 on revenue of $359.2 million. "As opposed to any delayed quarterly report we've encountered in the past, we don't have any concerns that results or business trends are softer than expected but rather confidence that the trends are stronger," Canaccord said in a research note. "The qualitative conclusion we anticipate from the quarterly report is further closure to the accounting questions, which led to unfounded volatility in the shares, will occur." The firm expects both brewer and K-cup shipments will be strong. It anticipates the company will most likely beat its forecast of 1 million brewers, which would reflect year-over-year growth of 41%, and sees "modest upside" to its forecast of 323.6 million K-cups. Margins may be a particular bright spot, Canaccord said. "
Canaccord doesn't expect the Starbucks' situation to resolve itself until at least spring 2011, but made clear it sees the developing story as "opportunity, not risk." Going into Thursday's report, Wall Street remains largely bullish on the stock with 7 of the 10 analysts covering the shares at strong buy (5) or buy (2). The valuation is starting to look a bit rich, however, with the stock already closing in on the analysts' median 12-month price target of $40, and the shares trading at a forward price-to-earnings multiple of 32X vs. competitor Peet's Coffee & Tea ( PEET) at 26X and Starbucks at 19X. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron. >To submit a news tip, send an email to: email@example.com