Analyst: Green Mountain Coffee has room to grow

Analyst Alton Stump initiated coverage on Green Mountain with a "Buy" rating and said in a note to investors that the coffee roaster "has an abundance of growth opportunities over the next 24 plus months."

Stump said the company will likely continue to benefit from growth in the overall specialty coffee industry and could get a boost from growing consumer awareness of single-cup brewers versus regular drip cofeemakers.

Green Mountain sells Keurig single-cup brewers for both home and office use. Green Mountain coffee is also used by Keurig brewers. Green Mountain bought Keurig in June of 2006.

"We spoke to 80 retail locations currently carrying Green Mountain's Keurig brewers, including Costco, Bed Bath & Beyond, Target, Bloomingdale's, Dillard's, and Wegmans," he said. "Our findings picked up robust single-cup brewer category growth, driven primarily by increased consumer awareness."

Stump also said Green Mountain is expanding outside its New England and Mid-Atlantic home base and starting to sell Keurig brewers in new places, like supermarkets, club stores and hotels.

Stump set a price target of $53.

Shares rose $1.36, or 3.4 percent, to $41.96 in afternoon trading.