On January 19, Zacks Investment Research upgraded
Krispy Kreme Doughnuts Inc.
) to a Zacks Rank #1 (Strong Buy) backed by its international
Why the Upgrade?
Strong momentum in the company's underlying business is
prompting analysts to raise earnings expectations. As a result,
EPS estimates for this year and next are going up.
Krispy Creme is rapidly expanding into emerging markets. that
insulates it from the ongoing macroeconomic headwinds across the
globe. During 2012, Krispy Kreme inked several development deals
with franchises across India, Russia, the Philippines, the United
Kingdom and other countries. It includes the company's deal with
Star360 Group to set up 15 Krispy Kreme franchise locations in
Singapore over the next five years. More recently, in December
2012, Krispy Kreme opened its 500
international location in Mexico. In January 2013, Krispy Crème
opened its first franchised outlet in the city of Bangalore. The
latest opening came in the wake of the signing of a development
deal between Krispy Kreme and Citymax Hotels Pvt. Ltd in June
The company has beaten estimates back-to-back in the second
and third quarters of fiscal 2013 by 50.0% and 40.0%,
respectively. At its third quarter earnings call, the company
also upped its expectations for the upcoming quarter.
Krispy Creeme also has a Zacks Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of +9.1%. This is very meaningful and a leading indicator of a
likely positive earnings surprise in the coming quarter.
Other Stocks To Consider
You can also consider investing in stocks that offer exposure
attractive retail restaurants segment like
BOB Evans Farms Inc.
) that carry a Zacks Rank #2 (Buy).
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