Wedbush adds Dutch Bros to Best Ideas List, raises price target to $37

Wedbush raised the firm’s price target on Dutch Bros to #37 from $35, while keeping an Outperform rating on the shares. The firm also added Dutch Bros to Wedbush’s Best Ideas List. Wedbush believes the magnitude of sales transfer to have peaked in 2023, and to gradually decline in 2024 and thereafter. Concurrently, management has focused on a number of company-specific transaction drivers that the firm thinks are in the very early innings. Additionally, Wedbush would not be surprised if pricing, inclusive of CA, is similar in 2024 as in 2023. As such, it views current 2024 same-store sales growth expectations as realistic. The firm also views margin expectations as realistic, and expects Q4 results and 2024 guidance to act as a positive near-term catalyst to drive an expanding valuation.