Krispy Kreme Stock Downgraded Before Earnings

The stock has been battling pressure at the $14 level

Assistant Editor
Nov 8, 2021 at 10:33 AM
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Krispy Kreme Inc (NASDAQ:DNUT) stock is down 1.4% to trade at $13.89 at last check, after a downgrade from Truist Securities to "hold" from "buy," with a price-target cut to $15 from $21. The firm noted that the labor shortage and wage inflation could postpone the company's expansion plans, but it still expects Krispy Kreme to post solid results for its upcoming earnings report.  

Analysts were bullish on DNUT heading into today. Six of the eight analysts covering the stock called it a "buy" or better. Plus, the 12-month consensus price target of $18.11 is a 29.4% premium to current levels. 

The stock has been consolidating below the $14 level since the start of November, with pressure from its 40-day moving average preventing a rally attempt off DNUT's late-October lows. DNUT has been publicly traded since early July, after it was previously public from 2000 to 2016, and is down 12.3% in the last three months. 

Today's bear note comes ahead of the stock's third-quarter earnings report, due out after the close on Tuesday, Nov. 9. DNUT dropped 6.9% after its August report, and this time around the options pits are pricing in a post-earnings swing of 15.3%. 

It's also worth noting that though short interest has been on a downtrend, losing 18.1% during the most recent reporting period, it still makes up 6.5% of Krispy Kreme stock's available float. In other words, it would take over four days to buy back these bearish bets, at DNUT's average pace of trading. 

 

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