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There may be more upside to Dutch Bros in 2023 investors expect, according to Wedbush. Analyst Nick Setyan upgraded shares of the drive-thru coffee franchise to outperform from neutral. He maintained his price target of $37 per share, implying 14.9% upside from Tuesday’s close price. “Near-term consensus [same-store sales] growth estimates remain frustratingly aggressive despite management’s consistent and clear messaging. Nevertheless, given the cadence of openings, we expect 2023 revenue to be at or above the top end of guidance,” Setyan wrote in a Wednesday note. “We view BROS’ current valuation as an overly pessimistic assessment of its medium- and long-term annual growth algorithm,” Setyan added. Setyan also thinks that Dutch Bros’ strong rewards program will also help drive revenue. “Management is laser-focused on increasing the stored value portion of rewards (current promotion for pre-loading is a good example), along with the ongoing growth of overall rewards members and tender, which should help throughput,” Satyan noted. Shares of Dutch Bros were up 3.8% Wednesday morning following the upgrade. The stock has gained 14.2% year to date. However, it’s down nearly 40% over the past 12 months. —CNBC’s Michael Bloom contributed to this report.
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