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If you go back a few months, I was incredulous back when analyst Howard Penney of Prudential not only initiated coverage on Krispy Kreme (NYSE:KKD) with a bullish opinion, but offered up a valuation even though the company hadn't filed financials.

Now that financials are filed, Krispy Kreme is back to reporting quarters on a timely basis, as the company did Thursday with its fourth quarter. Yet, as bewildering as his initial report was, Penney continues to hold firm with a $17 price target even though the company missed his expectations, didn't offer guidance and Penney himself lowered numbers for this year's fourth quarter and its following fiscal year as a whole. (He's still "upbeat" on the turnaround and is impressed by rising cash, falling debt.)

This time, investors are more dubious. Maybe they realize that many of the things being discussed by Krispy Kreme, including convenience stores, small stores and international growth have been tried before.. But don't worry: The whole wheat doughnut will save the day.

The beat, my friends, goes on.

Source: Krispy Kreme: Bewildering Analyst Support