Investors should wait for a pullback before starting a position in Dutch Bros ( NYSE: BROS ), according to Guggenheim.
Equity analyst Gregory Francfort explained that the company has “best-in-class unit economics and the highest growth algorithm in restaurants,” which makes its premium valuation reasonable. However, the coffee-chain’s over 50% surge since the start of 2023 has balanced the risk/reward proposition for the stock.
“While we think that Dutch Bros deserves a healthy valuation premium to its competitors, we have a difficult time seeing material upside to shares right now,” he advised. “Investors should wait for a better entry point to add to positions.”
Read more on the expectations for the chain’s February 22 earnings report .
For further details see:
Dutch Bros started at Neutral as Guggenheim assesses 2023 rally