Dain Rauscher Cuts Krispy Kreme Rating
Dain Rauscher downgraded Krispy Kreme (KKD ) to buy from strong buy.
Analyst David Geraty says Q2 EPS is expected to increase 30.5% to $0.08, which is in line with his estimate, reflecting continued sales momentum and margin gains. He says total revenues were expected to increase 20.8% to $84.5 million. He says sales and operating trends remain strong, however, he downgraded the donut maker to reflect significant stock price appreciation since his upgrade at $16 in February. He notes the stock has nearly achieved his revised $44 target (previously $33). Given recent strength and premium valuation, Geraty downgraded the shares. He maintains his $0.39 fiscal 2002 (Jan.) EPS estimate, and $0.50 for fiscal 2003.