Krispy Kreme (DNUT – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Jon Tower from Citi maintained a Hold rating on the stock and has a $3.60 price target.
Jon Tower has given his Hold rating due to a combination of factors affecting Krispy Kreme’s business outlook. The company’s model has been challenging to predict, with significant changes over the past few years, such as the discontinuation of certain partnerships and the suspension of anticipated growth drivers like the MCD partnership. These uncertainties have made it difficult to confidently forecast the company’s fundamentals.
Additionally, the decision to cut dividends reflects the current level of uncertainty, signaling to the market that investors might remain cautious until there’s clear evidence of renewed growth avenues. Adjusted earnings estimates for 2025 and 2026 have been revised downward due to lower expectations for both revenue and profit margins. Consequently, the price target has been adjusted to reflect these changes, indicating a cautious outlook on the stock’s performance.
According to TipRanks, Tower is a 5-star analyst with an average return of 13.6% and a 60.87% success rate. Tower covers the Consumer Cyclical sector, focusing on stocks such as Domino’s Pizza, McDonald’s, and Jack In The Box.
In another report released yesterday, Truist Financial also downgraded the stock to a Hold with a $5.00 price target.