Strength Seen in Krispy Kreme (DNUT): Can Its 6.3% Jump Turn into More Strength?

·2 min read

Krispy Kreme (DNUT) shares ended the last trading session 6.3% higher at $15.31. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 9.9% gain over the past four weeks.

Shares of Krispy Kreme got a boost from the company’s recent deal with Mc Donald’s, per industry experts. McDonald’s is offering three of Krispy Kreme’s doughnuts (he Original Glazed Doughnut, the Chocolate Iced with Sprinkles Doughnut and the Chocolate Iced Kreme Filled Doughnut) to more local restaurants, starting Mar 21. Krispy Kreme remains well placed for 2023, thanks to its premium offerings.

This doughnut wholesaler and retailer is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of -12.5%. Revenues are expected to be $400.46 million, up 7.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Krispy Kreme, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DNUT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Krispy Kreme is a member of the Zacks Consumer Products - Staples industry. One other stock in the same industry, Albertsons Companies, Inc. (ACI), finished the last trading session 1.6% higher at $19.65. ACI has returned -9.9% over the past month.

Albertsons Companies, Inc.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.68. Compared to the company's year-ago EPS, this represents a change of -9.3%. Albertsons Companies, Inc. currently boasts a Zacks Rank of #3 (Hold).

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