Krispy Kreme Intrinsic Value Calculator – JPMorgan Downgrades Krispy Kreme, Questions Company Execution

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JPMorgan has recently downgraded Krispy Kreme ($NASDAQ:DNUT) and raised questions about their ability to execute. The company’s signature product is an original glazed doughnut, which is made fresh daily. In addition to the original glazed, the company offers a variety of doughnuts, coffees, and other beverages and treats. Krispy Kreme has expanded to offer catering services, online ordering, and delivery to make their products more accessible. The downgrade by JPMorgan was triggered by concerns about Krispy Kreme’s execution ability. The company has seen a steady decline in same-store sales, which is a key metric for measuring performance.

Additionally, JPMorgan has questioned whether the company can sustainably grow its customer base given the competitive landscape. Investors have responded by sending the stock price significantly lower. Krispy Kreme executives have sought to reassure investors that the company is executing on its long-term strategy. The company has focused its efforts on increasing global brand awareness and expanding its catering services and delivery options. Nonetheless, analysts remain skeptical that this will be enough to reverse the downward trend in same-store sales. Investors will be watching closely to see if Krispy Kreme can deliver on its promises in the coming quarters.

Price History

On Monday, JPMorgan downgraded Krispy Kreme‘s stock from “Neutral” to “Underweight”. This move was prompted by concerns over the company’s execution and its near term outlook. JPMorgan noted that Krispy Kreme’s stock opened at $12.8 and closed at $12.9, down by 1.3% from its last closing price of 13.0. The downgrade made the second analyst downgrade in the last few months, as Credit Suisse had downgraded the stock back in January. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Krispy Kreme. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Krispy Kreme. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Krispy Kreme. More…

Key Ratios Snapshot

Some of the financial key ratios for Krispy Kreme are shown below. More…

Analysis – Krispy Kreme Intrinsic Value Calculator

GoodWhale’s analysis of KRISPY KREME‘s fundamentals has revealed an intrinsic value of around $15.3 per share. This value has been calculated using GoodWhale’s proprietary Valuation Line. Currently, the stock is trading at $12.9, indicating it is undervalued by 15.7%. GoodWhale believes that KRISPY KREME’s stock price is a fair value and is an attractive opportunity for investors. More…

Peers

In the competitive world of donut making, there are a few key players that stand out. Krispy Kreme Inc, Loblaw Companies Ltd, Woolworths Group Ltd, and Atacadao SA are all major companies in the industry. They all have their own unique recipes, strengths, and weaknesses. However, Krispy Kreme seems to be the clear leader in terms of market share and profitability.

– Loblaw Companies Ltd ($TSX:L)

Loblaw Companies Ltd. is a Canadian food and pharmacy retailer headquartered in Brampton, Ontario. The company has more than 2,000 stores across Canada and employs more than 190,000 people. The company’s grocery store banners include Loblaws, Real Canadian Superstore, Fortinos, No Frills, and Shoppers Drug Mart. Loblaw is the largest food retailer in Canada and the largest pharmacy chain in the country. The company also has a large financial services division that includes President’s Choice Financial and PC Insurance.

– Woolworths Group Ltd ($ASX:WOW)

Woolworths Group Ltd is a retail company with operations in Australia and New Zealand. The company has a market capitalization of 40.58 billion as of 2022 and a return on equity of 23.27%. Woolworths Group Ltd is engaged in the retail sale of food, liquor, petrol, general merchandise, and home improvement products. The company also provides financial services, including credit cards, personal loans, and insurance products.

– Atacadao SA ($OTCPK:ATAAY)

Atacadao SA is a Brazilian company that operates as a wholesale distributor of food, non-food items, and personal care products. The company has a market cap of 7.48B as of 2022 and a Return on Equity of 19.02%. Atacadao SA operates through two segments: Food Distribution and Non-food Distribution. The Food Distribution segment offers meat, poultry, fish, fruits, vegetables, sugar, coffee, grains, and dairy products. The Non-food Distribution segment includes general merchandise, home appliances, electronics, and personal care products.

Summary

JPMorgan has downgraded its investment rating for Krispy Kreme from ‘neutral’ to ‘underweight’, citing a lack of visibility of the company’s execution. Investors are advised to exercise caution in the near-term with Krispy Kreme, as there is elevated risk associated with the stock. Analysts have suggested that the company has not fully capitalized on recent growth opportunities, and its efforts to diversify its product offerings in the foodservice and grocery channels have not been as successful as anticipated. Despite optimistic long-term prospects, JPMorgan suggests that investors should await more concrete evidence of progress before investing in shares of the company.