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An HSBC analyst downgraded shares of Krispy Kreme Inc (NASDAQ:DNUT) to Hold from Buy, lowering the price target to $15 from $17 per share on lower earnings.
Krispy Kreme reported earnings on Wednesday, missing earnings and revenue expectations, while guidance disappointed. The company’s EPS came in at $0.08, $0.02 worse than the analyst estimate of $0.10, while revenue for the quarter came in at $375.2 million versus the consensus estimate of $385.32 million.
“An investor day on 15 December now has a new batch of questions to answer that the earnings call left unaddressed,” said the analyst.
Krispy Kreme shares tumbled 12% following the report. Its shares are now down 34% in 2022.
“Much of the uncertainty we raise in this report was absorbed by the market. However, pending more clarity from management on how it will optimally capture the value of the brand with stronger revenue management and in anticipation of more insight regarding the limitations shown by the hub and spoke model to drive earnings we downgrade DNUT to Hold (from Buy) with 18% implied upside on our DCF based TP of USD15 (from USD17) as we adjust our model for management’s new guidance,” concluded the analyst.
