J.P. Morgan Adjusts Ratings on 2 Restaurant Chains

The firm flipped its ratings on Dutch Bros and Krispy Kreme

Deputy Editor
Nov 20, 2023 at 10:58 AM
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J.P. Morgan Securities chimed in on coffee and donuts this morning, flipping its ratings on two large chains. The brokerage upgraded Dutch Bros Inc (NYSE:BROS) to "overweight" from "neutral," and downgraded Krispy Kreme Inc (NASDAQ:DNUT) to "neutral" from "overweight," seeing DNUT's potential upside already factored in to its 23% year-to-date lead.

The firm also lifted BROS' price target to $35 from $30. At last glance, Dutch Bros stock was up 1.6% at $28.30, earlier as high as $29.01. Just shy of positive territory for 2023, the equity has found a solid line of support at the $27 mark, though its 200-day moving average lingers above as potential pressure. Meanwhile, options traders are targeting the security at double the amount typically seen at this point, with the January 2024 35-strike call seeing the most activity. 

At last look, DNUT was down 12% to trade at $12.79, though its 40-day moving average appears to be keeping losses in check. It's also worth noting that shorts have been building their positions, with short interest up 26% over the last month. The 13.83 million shares sold short account for a hefty 20.9% of the stock's available float, and would take nearly 13 days to cover, at Krispy Kreme stock's  average pace of trading. 

 

 

 

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