NEW YORK (TheStreet) -- Green Mountain Coffee Roasters (GMCR) exploded in pre-market trading Thursday, after announcing a deal with The Coca-Cola Company (KO) a day earlier. Coke will acquire a 10% minority stake in Green Mountain and has signed a 10-year partnership agreement to develop a cold pod-based, at-home beverage system.
Investment firm Stifel Nicolaus upgraded Green Mountain to "hold" from "sell", on the belief the partnership lessens the risk involved with the new platform transition.
Before the bell, shares had surged 42% to $114.85, while Coke was up 1.3% to $38.10.
TheStreet Ratings team rates GREEN MTN COFFEE ROASTERS as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate GREEN MTN COFFEE ROASTERS (GMCR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
- You can view the full analysis from the report here: GMCR Ratings Report