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Key Takeaways
- Wells Fargo kicked off protection of two quick-service food and drinks chains, Dutch Bros and Wingstop, with "purchase" rankings Wednesday.
- The analysts mentioned they imagine Dutch Bros has a “disruptive technique” and may very well be poised for “sturdy development.”
- They mentioned Wingstop's inventory additionally has room to rise because the chain expands and good points market share.
Wells Fargo kicked off protection of two quick-service food and drinks chains, Dutch Bros and Wingstop, with "purchase" rankings Wednesday.
Dutch Bros (BROS), a restaurant chain identified for its drive-throughs, has a “disruptive technique” and may very well be poised for “sturdy development,” Wells Fargo analysts mentioned. They gave the inventory an $80 worth goal—barely beneath the roughly $83 consensus goal compiled by Seen Alpha and 14% above the place the shares closed Tuesday.
Wells Fargo analysts are amongst a number of analysis groups that assessed Dutch Bros forward of its scheduled investor convention Thursday, and spotlight the potential of the corporate’s plans to develop meals choices and cell ordering. These initiatives may contribute to a ten% bump within the 12 months forward to common unit quantity—or the standard gross sales generated at every retailer, Wells Fargo mentioned.
“[Dutch Bros] enterprise is [about] 90% drive-up immediately, and the idea persistently struggles with lengthy traces throughout peak demand intervals (aka morning & afternoon espresso rushes),” the analysts mentioned, including that not too long ago added cell ordering “has the potential to be a significant throughput unlock.”
Dutch Bros shares have greater than doubled in worth over the previous 12 months because the espresso firm moved into new markets and opened its 1,000th retailer.
In contrast, Wingstop (WING) shares are down about 40% over the identical interval. Nevertheless, Wells Fargo recommended its slide may provide traders a possibility for “premium development.” The corporate’s inventory has slumped in current months as a downbeat 2025 outlook and softer gross sales weighed on the inventory, however Wells Fargo analysts mentioned the hen wing chain has sturdy potential.
The analysts gave Wingstop a $270 worth goal—practically 23% above Tuesday's closing worth, however beneath the roughly $321 consensus goal from Seen Alpha.
Wingstop operates its outlets extra effectively than different quick-service eating places and is aware of easy methods to achieve market share with limited-time choices, Wells Fargo mentioned. It additionally has the chance to develop, particularly internationally, the analysts mentioned.
