2023-08-11 09:50:51 ET
Krispy Kreme ( NASDAQ: DNUT ) rose 4.6% on Friday morning after tumbling the previous day on earnings.
JP Morgan defended the company, reiterating its Overweight rating, and saying, “we view Krispy Kreme as a large and widely admired brand, and we believe increased accessibility will allow the company to more fully participate in the $650b “global indulgence” market.”
The firm, however, noted the “pattern of stock volatility,” and at its August 10 closing price of $12.43, “the stock remains below its $17 IPO price realized in June 2021 as well as our new $16 Dec-24 price target.”
The company seems to be honing in on a “doughnut logistics” strategy, which involves revolving growth around existing “hubs with spokes” assets to drive both revenue growth and incremental margin on top, JP Morgan noted.
On Thursday, the doughnut maker recorded second quarter net revenue up 9% to $408.9M, which missed the average analyst estimate by $1.61M. Non-GAAP EPS of $0.07 was in line with expectations.
Global Points of Access, which reflect locations where fresh doughnuts and cookies can be purchased, increased by 462 during the quarter and 1,035 year-to-date, providing consumers with access to Krispy Kreme and Insomnia Cookies through 12,872 locations around the world.
The doughnut maker has had a volatile 12 months, with shares tanking in August 2022 and again in December after reporting earnings.
DNUT is down 10% in the past 12 months and up 3.7% over the past six months.
The stock has two Strong Buys, three Buys and five Hold ratings from Wall Street analysts.
More on Krispy Kreme:
- Krispy Kreme, Inc. ( DNUT ) Q2 2023 Earnings Call Transcript
- Krispy Kreme falls as sales fall short; New country openings on track
- Krispy Kreme Non-GAAP EPS of $0.07 in-line, revenue of $408.88M misses by $1.61M
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Krispy Kreme resurges after weak earnings as JP Morgan defends the doughnut maker