Shares in Krispy Kreme (DNUT) plunged today after suggestions that the stock price has some way to go before it hits the bottom.
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Bad Taste for Investors
DNUT stock soured 13% as analyst Brian Harbour from Morgan Stanley cut his rating on the sweet treat maker to underweight from equalweight and halved his price target on the stock to $6 a share. It follows a disappointing fourth quarter revenue update from Krispy Kreme earlier this week which revealed that total revenue for the quarter had thinned 10% to $404 million. This was partly due to a cyber attack on the business at the end of last year.
However, what really left investors with a bad taste in their mouth was the expectation that the company expects full-year 2025 net revenue of between $1.55 billion and $1.65 billion, compared with estimates of $1.76 billion.
Stock Could Keep Sliding
Its stock has already slipped by 33% this week. However, Morgan Stanley said as “bad as things have been,” the stock is likely to keep sliding. “It still has some distance to go before finally finding a bottom,” Harbour said. “We’re thinking about broader demand indicators and how the company is going about targeting those.” Harbour also trimmed his 2025 revenue forecast for Krispy Kreme by nearly 9%. He now expects the company to generate around $1.58 billion in sales this year. Five-star TipRanks-rated analyst Brian Mullan at Piper Sandler lowered his price target to $12 from $18 because of those missed expectations.
Is DNUT a Good Stock to Buy?
On TipRanks, DNUT has a Moderate Buy consensus based on 3 Buy, 1 Hold and 1 Sell rating. Its highest price target is $14. DNUT stock’s consensus price target is $11.40 implying an 85.06% upside.
