Tesla could be a $10,000 stock in a decade, says longtime bull Ron Baron
Investing.com - UBS maintained its Buy rating and $85.00 price target on Dutch Bros Inc. (NYSE:BROS) following the company’s third-quarter results that showed strong same-store sales momentum. This target represents significant upside from the current price of $54.30, aligning with the broader analyst consensus that remains bullish with a 1.42 recommendation rating (where 1 is Strong Buy). InvestingPro data shows BROS trading near its Fair Value, with the stock delivering an impressive 59.02% return over the past year.
The coffee chain raised its 2025 revenue guidance to $1.61-1.615 billion from $1.59-1.60 billion, supported by an improved same-store sales forecast of approximately 5%, up from the previous 4.5% estimate. Despite these top-line improvements, Dutch Bros reiterated its adjusted EBITDA guidance of $285-290 million, reflecting incremental cost pressures including accelerating coffee costs. The company has demonstrated strong revenue growth of 29.8% over the last twelve months, with last reported revenue reaching $1.45 billion.
Dutch Bros confirmed its 2025 new store opening target of 160 units, with any openings beyond this number expected to be incremental to the company’s 2026 target. Initial 2026 guidance calls for approximately 175 new store openings, supported by attractive unit economics, investments in people and processes, and a record development pipeline with about 30 new shops approved monthly. With a current market capitalization of $9.51 billion and a 7% return on invested capital, the company appears positioned to fund its ambitious expansion while maintaining financial stability.
While UBS noted that increased costs from elevated coffee prices and other expenses could pressure margins in the near term, the firm believes Dutch Bros’ long-term shop margin target of 30% remains achievable. The company’s current gross profit margin stands at 26.72%, according to InvestingPro data. The company’s third-quarter performance was driven by traffic growth, with momentum apparently maintained into the fourth quarter despite slower trends across most of the restaurant industry.
UBS highlighted Dutch Bros as its top pick in the restaurant sector, citing traffic momentum, strong new store productivity supporting mid-teens percentage store expansion, and potential for over 20% EBITDA growth as factors that could drive share price appreciation. Investors should note the stock’s high volatility (beta of 2.57) and premium valuation (P/E ratio of 112.7), though InvestingPro gives the company a "GOOD" overall financial health score of 2.85. For deeper insights into BROS and 1,400+ other stocks, the comprehensive Pro Research Report is available exclusively to InvestingPro subscribers.
In other recent news, Dutch Bros Inc. reported its third-quarter 2025 earnings, which surpassed analyst expectations. The company achieved an adjusted earnings per share of 19 cents, exceeding the forecasted 17 cents. Additionally, Dutch Bros reported a revenue of $424 million, which was higher than the projected $414.78 million. In terms of sales performance, the company saw strong same-store sales growth, with company-operated shop comparable sales increasing by 7.4% and systemwide comparable sales rising by 5.7%, both surpassing consensus expectations. Despite these positive results, Piper Sandler adjusted its price target for Dutch Bros from $73 to $63, maintaining a Neutral rating on the coffee chain operator. These developments reflect a combination of strong operational performance and cautious analyst outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.