Dutch Bros ( NYSE: BROS ) rallied for a second straight day after J.P. Morgan upgraded the restaurant stock to an Overweight rating early on Wednesday.
Shares of BROS were up 6.65% at 3:25 p.m. on Thursday and are up more than 12% for the week.
Some traders are pointing to short squeeze action on BROS with short interest at almost 20% of total float.
While BROS has fallen sharply from its 52-week highs, the restaurant stock is still about 40% above its IPO pricing level of $23, which makes it just one of a handful of stocks from the IPO class of 2021 to be a positive share price gainer.
J.P. Morgan's price target of $38 on BROS indicates the firm thinks the rally is just getting started. Analyst John Ivankoe said the PT is based on a 4,000 store total addressable market including a 9% discount rate and a 10% equity dilution to meet the capital requirements above the current available facility.
Another positive read came out recently from Allegra Group with the firm forecasting strong growth for BROS and peers.
"US coffee shop market remains buoyant and is expected to grow solidly over the next decade as younger consumers drive demand for premium, specialty coffee throughout the US."
See all the growth metrics on BROS.
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Dutch Bros. rally keeps percolating with second day of gains