Why Krispy Kreme Stock Was Sinking This Week

It's hard to argue that Krispy Kreme (NASDAQ: DNUT) doesn't sell tasty treats that consumers love. It's a bit more of a stretch, however, to convince investors that the donut slinger's stock is an attractive investment. On the back of a bearish new analysis, Krispy Kreme's share price was tumbling by 14% week-to-date as of Thursday night, according to data compiled by S&P Global Market Intelligence.

Not so sweet

Monday morning, before market open, JPMorgan Chase's Rahul Krotthapalli set the tone for the subsequent trading days with said analysis. In it, he made a fairly deep cut to his price target, reducing it to $8 per share from his preceding $13. Although he maintained his overweight (i.e., buy) recommendation, that change was relatively dramatic.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

According to reports, Krotthapalli's new take is based on his growing doubts that Krispy Kreme can effectively execute its "delivered fresh daily" strategy (the company aims to concentrate on large wholesale accounts for big restaurant chains and retail outlets).

The analyst's maintenance of the buy recommendation, though, indicates he still has hope the company will effect this.

Donut declines

These days, it's easy to be down on Krispy Kreme, as the disappointing fourth-quarter 2024 results published at the end of February continue to leave a bad taste in the mouths of investors. Not only did the company report sinking sales and non-GAAP (adjusted) profitability, but it missed on both those metrics. Worse, it guided for continued declines across the entirety of 2025.

I don't see any great catalyst for Krispy Kreme, particularly in this age of the increasing health consciousness among the American consumer. Like Krotthapalli, I think the company's go-to strategy is clever, but it won't be worth much if it isn't implemented to any great degree.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $300,143!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $41,138!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $495,976!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of March 10, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.