Processing Magazine

Jamba shares surge on beverage deal with Nestle

June 2, 2008
The Associated Press is reporting that shares of Jamba Inc. surged recently after the company launched a line of ready-to-drink beverages with the U.S. division of Nestle SA, although an analyst said the stock''s movement may be overdone.

Jamba shares spiked 30 cents, or 13.6 percent, to $2.50. The stock has dropped from a 52-week high of $10.89 last June to a low of $2.10 in March.

Jefferies & Company Inc. analyst Jeff Farmer, who assigned the stock a "Hold" rating, said the price jump appears overdone, noting that the company first announced the partnership in December 2007.

Farmer also said he does not expect the royalties from this program to exceed 3 cents per share in 2009.

The financial terms of the agreement were not disclosed and a Jamba representative was not immediately available to comment.

In its statement, the company said Jamba Smoothies and Jamba Juices are now available in certain Jamba Juice store locations, as well as grocery retailers and convenience stores; including Target, Safeway, Albertsons, Ralph''s, 7-Eleven, Raley''s and Walgreens.

Jamba said the beverages, which are made with real fruit and include extra nutrients, are available in eight Western states: California, Oregon, Utah, Nevada, Arizona, Idaho, Washington and Colorado.