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Investing.com - TD Cowen has reiterated its Buy rating and $86.00 price target on Dutch Bros Inc. (NYSE:BROS), maintaining the coffee chain as a top pick despite investor concerns about McDonald’s (NYSE:MCD) launching specialty beverages and energy drinks. The company’s stock has surged over 108% in the past year, though InvestingPro analysis suggests current valuations are stretched, with a P/E ratio of 132.
The firm’s analysis suggests McDonald’s ventures into new beverage categories historically have not posed significant threats to established players in those markets, citing previous McDonald’s expansions into coffee, wings, and smoothies. Dutch Bros has demonstrated strong fundamentals, with revenue growing 29.8% over the last twelve months and maintaining a healthy current ratio of 1.64.
TD Cowen specifically pointed to McDonald’s 2008 McCafe rollout, noting that while Starbucks (NASDAQ:SBUX) experienced same-store sales challenges during that period, the decline was more attributable to the Great Financial Crisis than to McDonald’s competitive entry.
The research firm observed that Starbucks’ North America same-store sales actually accelerated during the latter part of the McCafe rollout and continued improving even after McDonald’s began advertising the line in May 2009.
TD Cowen further supported its position by highlighting that Dunkin’ U.S. outperformed Starbucks during 2008-2009 with same-store sales of -0.8% and -1.3% respectively, suggesting McDonald’s coffee push had no material negative impact and may have instead "elevated the entire category."
In other recent news, Dutch Bros Inc. reported its second-quarter earnings for 2025, surpassing market expectations. The company achieved an earnings per share of $0.26, which was significantly higher than the forecasted $0.18. Revenue also exceeded projections, reaching $416 million compared to the expected $403.14 million. Stifel reiterated its Buy rating and maintained a price target of $82.00, highlighting the company’s 28% revenue growth to $415.8 million in Q2 2025. RBC Capital raised its price target on Dutch Bros to $85.00 from $83.00, maintaining an Outperform rating due to the impressive second-quarter performance. TD Cowen also reiterated its Buy rating with a price target of $86.00, identifying Dutch Bros as its top pick and noting the company’s raised guidance. The coffee chain’s system same shop sales increased by 6.1%, with company-operated same shop sales rising by 7.8%, driven primarily by transaction growth. These recent developments reflect strong financial health and positive analyst sentiment towards Dutch Bros.
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