NEW YORK (TheStreet) -- Shares of Keurig Green Mountain Inc (GMCR) are gaining, up 0.47% to $154.63 in early market trading Friday, after the company had its price target raised to $185 from $166 by analysts at Goldman Sachs this morning.
Goldman analysts said Keurig Cold has the potential to be a disruptive innovation, and could be higher than SodaStream's (SODA) 1% household penetration.
The firm said Keurig Cold penetration could reach 14%, adding an incremental profit of between $7.59 to $12.69 per share by 2020.
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Analysts at Goldman said that they believe Keurig has surpassed barriers of adoption through its partnership with beverage maker giant The Coca-Cola Co. (KO) .
Separately, TheStreet Ratings team rates KEURIG GREEN MOUNTAIN INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate KEURIG GREEN MOUNTAIN INC (GMCR) a BUY. This is driven by some important positives, 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, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GMCR's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 5.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GMCR's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GMCR has a quick ratio of 2.32, which demonstrates the ability of the company to cover short-term liquidity needs.
- KEURIG GREEN MOUNTAIN INC has improved earnings per share by 23.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KEURIG GREEN MOUNTAIN INC increased its bottom line by earning $3.16 versus $2.28 in the prior year. This year, the market expects an improvement in earnings ($3.80 versus $3.16).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Food Products industry average. The net income increased by 33.4% when compared to the same quarter one year prior, rising from $116.27 million to $155.15 million.
- 49.91% is the gross profit margin for KEURIG GREEN MOUNTAIN INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.17% is above that of the industry average.
- You can view the full analysis from the report here: GMCR Ratings Report