On Tuesday, Barclays (LON:BARC) upgraded Dutch Bros Inc. (NYSE: NYSE:BROS) stock rating from Equal Weight to Overweight and substantially increased the price target from $38.00 to $70.00. The stock has already shown remarkable momentum, delivering an 85.7% return over the past year and currently trading near its 52-week high of $58.95.
According to InvestingPro data, 9 analysts have recently revised their earnings expectations upward for the upcoming period. The upgrade follows a positive outlook on the company’s future performance, particularly highlighting the introduction of new executive leadership in 2024 and the anticipated operational efficiencies and fresh ideas they are expected to bring.
Barclay’s analysis suggests that Dutch Bros, along with Shake Shack (NYSE:SHAK), which received a similar upgrade, are poised for significant growth. Both companies are characterized as mid-cap, high growth, fast casual brands that are expected to maintain their rapid expansion. Dutch Bros, now valued at $5.57 billion, has demonstrated this growth potential with impressive revenue growth of 30.5% in the last twelve months.
InvestingPro subscribers can access over 20 additional key metrics and insights about Dutch Bros’ growth trajectory through the platform’s comprehensive Pro Research Report. For the year 2025, the analyst forecasts that both companies will report comparable sales growth in the low single-digit-plus range and a unit growth in the mid-teens-plus range, which should support revenue growth in the mid-teens-plus as well.
The analyst also anticipates that Dutch Bros will benefit from leveraging scale to achieve stable to modest restaurant margin expansion and general and administrative (G&A) leverage. This operational efficiency is expected to propel EBITDA growth to high-teens to low-20 percentages for both companies.
Barclay’s outlook is further bolstered by the belief that the companies’ comparable sales comparisons are relatively modest and that their valuations are no longer outsized when compared to their high-growth peers. This assessment leads to the expectation that shares of Dutch Bros will continue to outperform in 2025.
In other recent news, Dutch Bros Inc. has seen a series of significant developments. The company’s revenue has seen a robust increase of 30.5% in the last twelve months, reaching $1.19 billion. This growth trajectory was acknowledged by Baird, which upgraded Dutch Bros’ stock rating from Neutral to Outperform, reflecting the company’s potential for strong growth. Similarly, UBS maintained a Buy rating for the company, raising its price target to $65.00, while Piper Sandler increased its price target to $51.00, maintaining a Neutral rating.
Dutch Bros also 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 anticipates a further increase of 1.0% to 2.0% in same-store sales for the fourth quarter of 2024.
In terms of personnel changes, the company recently appointed seasoned retail technology leader Venki Krishnababu as its new Chief Technology and Information Officer. This strategic move is expected to enhance customer experience through technology. These are some of the recent developments that reflect Dutch Bros’ focus on growth and strategic development.
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