Update shared on 01 Nov 2025
Analysts have lowered their price target for Krispy Kreme, citing concerns about execution risk and decreased visibility in the U.S. market following the canceled McDonald's partnership.
Analyst Commentary
Recent analyst commentary on Krispy Kreme highlights both optimistic and cautious viewpoints regarding the company's outlook and execution following the canceled McDonald's partnership.
Bullish Takeaways
- Bullish analysts see potential in Krispy Kreme's proposed turnaround plan if executed effectively. They suggest operational improvements could support a stronger growth trajectory.
- Opportunities for international expansion remain a positive factor. The company's brand recognition may fuel sales growth outside the U.S. market.
- Some analysts believe the core product's strong consumer appeal could help the company weather domestic challenges in the near term.
Bearish Takeaways
- Bearish analysts emphasize execution risk tied to the turnaround strategy. They note that operational missteps could further impact financial performance.
- Visibility in the U.S. market has decreased, raising concerns about forecasting future revenues and profit margins.
- There is skepticism about Krispy Kreme's ability to quickly regain momentum given declining trends in its primary domestic business.
- The lack of a revised price target after recent downgrades reflects ongoing uncertainty around the company's valuation and growth prospects.
What's in the News
- Krispy Kreme is expanding its presence in big-box retailers like Costco, Kroger, and Walmart, aiming to address limited product availability and reach more U.S. customers (New York Times).
- The company unveiled its first Hot Light Theater Shop in Madrid, Spain. This marks a significant step in its global expansion, with additional openings planned in Brazil and Uzbekistan before the end of 2025.
- A new limited-time Harry Potter themed doughnut collection launched in partnership with Warner Bros., attracting fans of the franchise to Krispy Kreme shops across the U.S.
- Krispy Kreme reported a non-cash partial goodwill impairment charge of $356 million and long-lived asset impairment charges of $22.1 million for the second quarter ended June 29, 2025.
Valuation Changes
- Fair Value remains unchanged at 3.7x. This reflects no revision in analysts' base valuation multiple.
- Discount Rate is stable at 12.32 percent. This indicates a consistent risk assessment by analysts.
- Revenue Growth estimate has edged down slightly from 4.69 percent to 4.68 percent.
- Net Profit Margin has increased marginally, moving from 8.15 percent to 8.20 percent.
- Future P/E ratio has decreased slightly, from 6.34x to 6.30x.
Disclaimer
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