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Krispy Kreme (NASDAQ:DNUT) was lifted to Buy from Hold with its price target raised to $20 from $15 per share by Truist Securities analysts on Wednesday.
They told investors in a note that the Buy rating is based on their belief that DNUT is one of the few packaged good companies that will post meaningful volume growth in 2023. In addition, they believe that with approximately 30% of sales coming from international markets, they expect the stock to be viewed as a prime FX beneficiary in 2H and that the Street is still underestimating the impact of the recently expanded McDonald’s (NYSE:MCD) in-store test.
“In 2022, DNUT posted greater than 12% organic top-line growth with LDD% pricing across the US and Intl,” they said. “If DNUT can maintain its top line momentum while its peers experience decelerating growth trends, we believe the stock’s multiple can expand further.”
In addition, Truist believes that with many US employees still only working in the office two to three days a week, the US environment is not fully reopened.
“In our view, continued reopening trends, including stopping off for a doughnut and coffee at your nearby Krispy Kreme store or buying a couple dozen for your officemates, should serve as a tailwind for the business,” the analysts wrote.
