Intel stock extends gains after report of possible U.S. government stake
Investing.com - Morgan Stanley (NYSE:MS) has reiterated its Underweight rating and $2.50 price target on Krispy Kreme (NASDAQ:DNUT) as the company shifts to turnaround mode following the termination of its McDonald’s (NYSE:MCD) partnership. According to InvestingPro data, the stock has fallen over 68% in the past year, with analysts’ consensus showing limited upside potential. InvestingPro’s analysis indicates the company’s overall financial health score is weak, with 12 additional warning signals available to subscribers.
The research firm notes that Krispy Kreme faces uncertainty that will depend on actions to free up cash, including refranchising, cost reductions, and reconsidering capital expenditures. The company was free cash flow negative in the second quarter, with proceeds from Insomnia Cookies preventing greater borrowing. InvestingPro data reveals concerning metrics, including a high debt-to-equity ratio of 2.05 and a low current ratio of 0.34, indicating potential liquidity challenges.
Krispy Kreme reported second-quarter revenue of $380 million, within its guided range of $370-$385 million, though this still included approximately 2,400 McDonald’s locations that ceased delivery as of July 3. The company is also rationalizing about 1,500 underperforming Delivered Fresh Daily (DFD) doors while planning to replace them with 1,100 new locations.
Second-quarter adjusted EBITDA underperformed at $20 million, 33% below the low end of the company’s $30-$35 million guidance range. Management estimated the McDonald’s partnership and its termination had a $12-$15 million negative impact on adjusted EBITDA in the first half of the year, with a similar impact expected for the remainder of 2023.
To improve cash generation, Krispy Kreme plans to refranchise one to two international markets by year-end while restructuring its U.S. West Coast joint venture to become a minority owner before ultimately exiting the arrangement. For detailed analysis of Krispy Kreme’s turnaround potential and comprehensive financial metrics, investors can access the full company research report on InvestingPro, which includes expert insights and detailed valuation analysis.
In other recent news, Krispy Kreme Inc. reported its second-quarter earnings for 2025, which revealed a notable miss on earnings per share (EPS) expectations. The company recorded an EPS of -$0.15, significantly underperforming the forecasted -$0.04. Despite this, revenue slightly exceeded projections, reaching $379.8 million compared to the expected $378.66 million. These financial results have drawn attention from investors and analysts alike. In light of the earnings report, some analysts have been reassessing their positions on the company. While the earnings miss was substantial, the revenue figures showed a slight positive deviation from expectations. These developments are part of the ongoing financial narrative for Krispy Kreme Inc.
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