Dutch Bros Inc. ( NYSE: BROS ) stock slipped in premarket trading as Baird moved to temper its outlook for the Oregon-based coffee chain.
In a note to clients on Monday, the firm cut its rating on shares from “Outperform” to “Neutral” as a surge for the stock since its first quarter earnings release has priced in the upside amid an uncertain macro environment. The note cited “rising risk of a downturn in broader discretionary spending” as a key factor that could cause confidence in the stock to erode and keep further upside in check.
Since its May earnings release, shares have jumped over 45% against an essentially flat S&P.
Shares of Dutch Bros ( BROS ) fell 3.36% in Monday’s premarket hours.
“To be clear, we consider this change a tactical move,” Baird’s note added as a caveat. “We remain bullish on longer-term fundamentals, and still believe patient investors ultimately can be rewarded in owning BROS given the company's highly differentiated positioning and visible high-ROIC unit growth opportunity.”
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Dutch Bros stock slips after downgrade at Baird