On Tuesday, TD Cowen analysts, led by Andrew Charles, reiterated a Buy rating on Dutch Bros Inc. (NYSE: NYSE:BROS) shares, maintaining a $65.00 price target. The stock, currently trading at $59.24, has shown remarkable momentum with a 100% return over the past year. The firm's positive outlook is based on the expectation of continued sales growth over the next two years, driven by mobile ordering capabilities and the planned introduction of food options in 2026.
The analysts project that the company's sales leverage in 2025 will be strong enough to offset the impact of higher coffee prices, which represent less than 10% of the cost of goods sold (COGS). According to InvestingPro data, the company maintains a healthy gross profit margin of 26.1% and operates with a moderate debt level. They also identified the upcoming investor meeting on March 27 as a potential positive catalyst for the stock. Dutch Bros is positioned as TD Cowen's top pick for 2025.
During a recent meeting with Dutch Bros CEO Christine Barone, CFO Josh Guenser, Senior Director of Investor Relations Paddy Warren, and Investor Relations Neil Patel, TD Cowen gained insights into the company's operational enhancements. These improvements are designed to accommodate the increased demand anticipated from mobile orders, beverage innovation, and the food launch.
The analysts highlighted the "flywheel effect" of mobile ordering on the digital business, noting over 1 million Dutch Rewards registrations in the third quarter of 2024. This figure significantly surpassed the 450,000 to 600,000 average quarterly registrations seen in 2022-23.
TD Cowen stands by its Street-high estimate of a 4.5% same-store sales growth for Dutch Bros in 2025, expressing continued enthusiasm for the company's growth trajectory. InvestingPro subscribers can access 15+ additional investment tips and a comprehensive Pro Research Report for deeper insights into Dutch Bros' financial health and growth prospects.
In other recent news, Dutch Bros Inc. has seen a flurry of analyst activity.
Stifel has maintained a bullish stance on the company, raising its price target from $53.00 to $62.00. The firm cites impressive sales trends and a strong promotional strategy as key factors driving Dutch Bros' growth. Barclays (LON:BARC) also upgraded the company's stock from Equal Weight to Overweight, with a substantial increase in the price target from $38.00 to $70.00.
Baird echoed this positive sentiment, upgrading Dutch Bros' stock from Neutral to Outperform and increasing the price target from $60 to $70. The firm highlighted the company's strong growth potential heading into 2025. Moreover, UBS maintained a Buy rating on Dutch Bros, raising its price target to $65.00, based on strong growth prospects and a revenue growth of 30.53% in the last twelve months.
In terms of company developments, Dutch Bros recently appointed Venki Krishnababu as its new Chief Technology and Information Officer. This strategic move is expected to enhance customer experience through technology. Additionally, the company reported a 2.7% increase in system-wide same-store sales and a 4.0% rise in company-operated sales for the third quarter of 2024. The company also anticipates a further increase of 1.0% to 2.0% in same-store sales for the fourth quarter of 2024.
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