Dunkin Stock Lower Despite Double Upgrade

Sentiment surrounding the stock has been mostly pessimistic

Deputy Editor
Apr 13, 2020 at 9:49 AM
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Dunkin Brands Group Inc (NASDAQ:DNKN) is unable to extend last week's rally this morning, down 0.6% at $57.64, despite Credit Suisse issuing a double-upgrade to the doughnut specialist to "outperform" from "underperform." The analyst also cut its price target to $67 from $73, but added that the company's business model is one of the most attractive in the restaurant space, even as the fast food chain turns to its drive-thru business during COVID-19. 

Dunkin Brands stock is fresh off its highest close since its early March bear gap, but today's breather has it falling short of its 40-day moving average -- a trendline that pressured the security lower during its Thursday trading session. The equity is still trading well below its year-to-date breakeven however, off roughly 24% in 2020. 

Most members of the brokerage bunch are wary of Dunkin Brands. Prior to today, 12 called the stock a tepid "hold," compared to just six calling it a "strong buy." Plus, the consensus 12-month price target of $65.37 is just a 12.9% premium to last night's close. 

Pessimism pervades the options pits, too. This is per DNKN's 10-day put/call volume ratio of 2.35 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all other readings from the past year, suggesting long-puts haven't been more popular. 

 

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