JP Morgan Downgrades Dunkin Brands to “Neutral”; Valuation Call (DNKN)


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Coffee and doughnuts seller Dunkin Brands Group Inc ( DNKN ) on Tuesday caught a big downgrade from analysts at JP Morgan.

The firm cut its rating on DNKN from "Overweight" to "Neutral" with a $33 price target. That target suggests a 7% downside to the stock's Monday closing price of $35.39.

A JP Morgan analyst commented, "Reflective of extremely strong outperformance, we are downgrading Dunkin' Brands to Neutral. The stock is up ~90% since the pricing of its IPO in July 2011, up ~45% YTD, and is just 4% off its recent high, in contrast to peers MCD, CMG, DPZ, YUM and SBUX, which are down 10-15% from their 52-week highs."

Dunkin Brands shares fell 66 cents, or -1.9%, in Tuesday morning trading.

The Bottom Line
Shares of Dunkin Brands ( DNKN ) have a 1.70% dividend yield, based on last night's closing stock price of $35.39. The stock has technical support in the $30-$32 price area. The stock is trading near all-time highs of $36-$37 a share.

Dunkin Brands Group Inc ( DNKN ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Stocks

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