Consumer Products

What to Expect From Keurig Earnings

Keurig Green Mountain Inc. (NASDAQ: GMCR) is scheduled to report its fiscal fourth-quarter financial results after the markets close on Wednesday. The consensus estimates from Thomson Reuters call for $0.71 in earnings per share (EPS) on $1.03 billion in revenue. The same period from the previous year had $0.90 in EPS on revenue of $1.20 billion.

Coca-Cola Co. (NYSE: KO) made some key investments over the past year, expanding its portfolio into other beverages besides just soft drinks. Keurig and Monster Beverage Corp. (NASDAQ: MNST) were the key targets for this investment. However, looking at the performance of both investments, Coca-Cola may be faced with the choice to let one go as they have each performed as polar opposites.

The tales of the tape are strikingly different for both Monster and Keurig. For one, Monster is closer to the high end of its 52-week trading range, while Keurig is stuck at its low end. It did not help that Keurig’s most recent earnings precipitated nearly a 30% drop in August.

In the second quarter, Keurig reported EPS of $0.80 from operations, on $969.5 million in revenue. That is a 5% sales decline, and the numbers compared to consensus estimates of $0.79 EPS and $1.04 billion in revenue. This performance appears to be representative of Keurig’s whole fiscal year.

A few analysts weighed in on Keurig ahead of its earnings report:

  • Wedbush has a Neutral rating but lowered its price target to $50 from $60.
  • Morgan Stanley has an Equal Weight rating and lowered its price target to $55 from $60.
  • SunTrust has a Neutral rating and lowered its price target to $50 from $60.
  • Canaccord Genuity reiterated a Hold rating and lowered its price target to $59 from $65.

So far in 2015, Keurig has vastly underperformed the market, with the stock down 69%, while over the past 52 weeks the stock is down 73%.

Shares of Keurig were trading up 1.5% at $40.75 in the noon hour Wednesday, with a consensus analyst price target of $62.25 and a 52-week trading range of $40.30 to $157.74.

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