Krispy Kreme Shares Plunge Following Goldman Sachs Downgrade
By Sam Boughedda
Investing.com — Krispy Kreme Inc (NASDAQ: DNUT ) stock fell 8% after Goldman Sachs analyst Jared Garber downgraded it to sell.
Garber cut it from neutral, setting a $14 price target. That did represent a 4% downside from Tuesday's close. However, the stock has now fallen below that level, trading around the $13.28 mark.
The analyst cited rising cost pressures across many key areas for Krispy Kreme's company-owned model, which Garber feels presents risks for margins.
In addition, he explained that consumer data implies that the brand may have limited pricing power to react to inflation, and with the indulgent food category only expected to grow 1.1% per year to 2025, it forced Garber to lower estimates for the company.
There is “limited clarity on the underlying drivers of top-line growth,” according to the analyst.
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