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On Tuesday, Truist Securities adjusted its outlook on Krispy Kreme (NASDAQ:DNUT) shares, reducing the price target to $12 from the previous $15, while maintaining a Buy rating on the company’s stock. The revision follows the doughnut chain’s fourth-quarter performance, which Truist’s analyst noted was on par with their estimates, excluding the effects of a cyber incident. The stock, currently trading at $7.12, sits near its 52-week low of $8.34, with a market capitalization of $1.2 billion.According to InvestingPro data, Krispy Kreme has 8 key investment insights available for subscribers, including valuable metrics on profitability and growth potential.
Krispy Kreme’s guidance for fiscal year 2025 came in below both the market’s and Truist’s expectations. Despite this, the company anticipates an organic sales growth of 5-7%, building on its current revenue of $1.71 billion and historical 5-year revenue CAGR of 16%. Truist emphasized that the current market reaction does not fully capture the company’s potential, as Krispy Kreme’s expansion plans remain on track.
The partnership with McDonald’s (NYSE: NYSE:MCD) is progressing, with expectations to be present in approximately 6,000 locations by the end of 2025. Additionally, Krispy Kreme continues to forge new retail partnerships, including the expansion of its presence in Walmart (NYSE: NYSE:WMT) stores and the rollout at Target (NYSE: NYSE:TGT).
In light of these developments, Truist Securities has recalibrated its estimates for Krispy Kreme and reaffirmed its Buy rating, albeit with a lowered 12-month price target. The adjustment reflects a more cautious valuation while still recognizing the growth opportunities ahead for the doughnut retailer.
In other recent news, Krispy Kreme Inc. reported underwhelming financial results for the fourth quarter of 2024, missing both earnings and revenue forecasts. The company recorded an earnings per share (EPS) of $0.01, falling short of the anticipated $0.10, and reported revenues of $404 million, below the expected $416.09 million. Despite these setbacks, Krispy Kreme achieved a milestone with over $100 million in global delivered fresh daily revenue for the first time. The company faced challenges, including a cybersecurity incident that impacted revenue by an estimated $10 million. Looking forward, Krispy Kreme has set a revenue forecast for 2025 between $1,550 million and $1,650 million, with organic revenue growth expected to be in the range of 5% to 7%. Analyst firms have not provided any upgrades or downgrades in response to these developments. The company continues to focus on expanding its distribution partnerships and aims to reach 12,000 McDonald’s locations by 2026.
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