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Takeaways
- Dutch Bros shares surged nearly 8% on Monday amid positive comments from analysts ahead of the drive-through coffee chain's planned investor day on Thursday.
- Morgan Stanley initiated coverage on the stock with an 'overweight' rating and an $82 price target, in line with the average estimate of analysts polled by Visible Alpha.
- UBS maintained its 'buy' rating on the stock and a price target of $90, about 28% higher than the closing price for Dutch Bros shares on Monday.
Dutch Bros shares surged Monday amid positive comments from analysts ahead of the drive-through coffee chain's investor day scheduled for Thursday.
Morgan Stanley began coverage of Dutch Bros with an ‘Overweight rating’, noting the company’s sensible model and “sizeable growth opportunity” by adding food to its menu and increasing mobile ordering.
“[Dutch Bros] Checks many boxes for us. A well-liked, loyal brand with good engagement and loyalty, a good category for growth with room for disruption and innovation, a straightforward, simple operating model, a good staffing model/culture, strong management, robust growth in unit sales currently hitting targets, underpinned by good economics and ample development space,” Morgan Stanley analysts wrote in a note.
Morgan Stanley set the price target at $82 for Dutch Bros, which is in line with Visible Alpha’s average price target.
Dutch Bros shares have gained nearly 8% to close Monday at $70.45.
UBS, which has a 'buy' rating on Dutch Bros stock, said the shares are positioned for further gains amid the likelihood of continued sales growth, with mobile sales and menu additions helping fuel the momentum. UBS has set a price target of $90 for the stock.
Dutch Bros opened its 1000th location in Feburary, having roughly doubled the size of its footprint over three-and-ahalf years.
