Drive-thru coffee franchise Dutch Bros (NYSE:BROS) is seeing stars currently after closing its second straight day of gains. Dutch Bros stock gained more than 7% on Tuesday, for a 26% increase so far this week. BROS fans are clearly excited over the coffee wave taking hold of the markets lately.
What’s bringing Dutch Bros back to life?
Coffee companies across the board are up lately after research from data analytics firm Placer.ai revealed increasing traffic at popular coffee chains. As per the report, coffee is handily outpacing the greater dining sector and has proved surprisingly resistant to otherwise cumbersome market forces. According to the report:
“The numbers reveal that necessity and convenience are not the only two drivers of coffee shop foot traffic. For the many coffee-drinkers working from home, making coffee in their kitchen is no replacement for the experience of a trip to the coffee shop. It seems that, despite the substantial YoY growth in home coffee machine sales between May 2020 and May 2021, homemade coffee is only a part of the mix and many still look to the coffee served by a professional barista.”
And who is topping the list in terms of year-over-year growth? You guessed it: Dutch Bros. The Oregon-based chain saw monthly visits jump sometimes up to 160% compared to its 2019 numbers. This far exceeds comparable reports by Starbucks (NASDAQ:SBUX) and Dunkin’ Donuts.
What do you need to know about the BROS bulls lifting up the popular chain?
5 Things to Know About Dutch Bros Stock After Today’s Jump
- Even prior to the generous Placer.ai report, Dutch Bros has been on the up and up. BROS reported strong revenue growth and plans for 125 news stores in its preliminary earnings report just two weeks ago.
- Dutch Bros is new to public life. The company only launched on the New York Stock Exchange this past October.
- Most price targets for BROS stock are lofty. In October, JPMorgan gave the coffee company an overweight rating and set a price target of $47. Which, given its current $49 price tag, seems almost conservative. Since then, the targets on the company have only improved. Currently, JPM maintains a $58 price target.
- Earlier this month, Dutch Bros hired its first chief technology officer in the form of Leigh Gower.
- While Dutch Bros technically still isn’t profitable, this is largely attributable to spending on expansions. Many suspect 2022 will be the first year the company will beat out its bottom line.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
