Truist Securities raised Krispy Kreme’s price target to $15 per share as its McDonald’s distribution deal aims to reach 12,000 locations by end-2026 and generate about $320 million in annual revenue.
Krispy Kreme (NASDAQ:DNUT) stock saw something of a sugar rush on Monday as the market reacted to claims, by one analyst team, that the donut firm’s deal is being underestimated by investors.
Truist Securities analysts reckon Krispy Kreme should be worth $15 per share, upgraded from $13, and the new target suggests some 33% upside to the current price of around $11.00.
The tie-up is expected to see Krispy Kreme stocked in 12,000 McDonald's locations by the end of 2026 and it promises to be worth $320 million of revenue per year, starting in year one.
Truist tipped Krispy Kreme to become a significantly larger ‘nationwide’ brand in the United States, whilst noting that it had previously been scarcely available in certain parts of America.
It echoes comments, in March, from Krispy Kreme chief executive Josh Charlesworth.
“The top request we receive from consumers, every day, is, ‘please bring Krispy Kreme to my town.’ Partnering with McDonald’s on a national scale will provide our fans and doughnut lovers unprecedented daily access to fresh doughnuts and the joy that is Krispy Kreme,” Charlesworth said.
Krispy Kreme is among a number of snack-food stocks to have been put on the back foot by investors, spooked by the potential future impact of satiety-boosting ‘weight loss’ drugs like Ozempic and Wegovy.
In 2024 to date, Krispy Kreme stock is down just over 23%. Today, meanwhile, it traded on the front foot, up 6.4% to change hands at $11.31 per share.
