Dutch Bros. ( NYSE: BROS ) gained 6.63% on Wednesday after J.P. Morgan upgraded the restaurant stock to an Overweight rating.
The firm said the recent pullback in shares made BROS an attractive pick amid concerns in the market over consumer discretionary spending.
"This discretionary occasion showed more volatility than expected, with 56% of customers under 25 drinking 80% cold beverages and 60% of sales after 12 noon - but employment and stable gas prices are key to more predictable sales."
The firm's new price target on BROS of $38 is based on a 4K store total addressable market including a 9% discount rate and a 10% equity dilution to meet the capital requirements above the current available facility.
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Why did Dutch Bros. rally today? Bullish call from J.P. Morgan