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Longbow Research Slightly Shifts Estimates For Krispy Kreme Doughnuts

Dwight Einhorn

In a report published Monday, Longbow Research analyst Alton Stump reiterated a Buy rating and $26.00 price target on Krispy Kreme Doughnuts (NYSE: KKD).

In the report, Longbow Research noted, “We are shifting estimates slightly but reiterating our BUY rating on KKD following our latest checks. Our most recent channel checks for KKD were mixed. Same-store sales growth from US franchised stores was lower than expected, but due entirely to a ramp up of new store builds that is undoubtedly a positive for KKD's story. Furthermore, we expect the focus from investors on Krispy Kreme will shift more towards the company's impressive new store growth platform and less on near-term comps in coming quarters. Regarding estimates, we are shifting $0.01 of EPS from 2Q15 into 3Q15 in order to reflect timing of lower same-store sales in 2Q but an improved new store revenue contribution in 3Q. 2Q15E EPS now sits at $0.17 (down from $0.18) and 3Q15E EPS lies at $0.18 (up from $0.17). Our FY15 and FY16 EPS estimates remain unchanged at $0.75 and $0.90, respectively.”

Krispy Kreme Doughnuts closed on Friday at $16.75.

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