Dutch Bros valuation attractive despite stock decline says Bank of America

Dutch Bros valuation attractive despite stock decline says Bank of America

Tue, September 22, 2026 at 8:59 PM GMT+3 2 min read

• BAC -0.36%
• BROS -0.85%

Dutch Bros Inc (NYSE:BROS) shares have fallen 37% since the coffee chain's second-quarter results, but Bank of America (BofA) says the stock's valuation remains attractive and has reiterated its 'buy' rating.

The analyst says concerns over near-term same-store sales and longer-term competition from other drive-through concepts have weighed disproportionately on the stock's valuation.

The away-from-home beverage category is among the fastest-growing segments in the restaurant industry, BofA said.

The coffee and café category has grown at a 7% compound annual rate since 2018, generating $55 billion in annual sales, behind only burgers and chicken among limited-service restaurant categories.

The share of consumers reporting espresso-based beverage consumption in the past week rose to 43% in 2025 from 37% in 2020.

Dutch Bros has guided for same-store sales growth of 4% to 5% in the third quarter, down from 9% in the first half of the year.

BofA said the company's innovation pipeline includes approximately three new items per quarter, while its marketing budget is also growing.

Dutch Bros' marketing spending stands at 1.8% of system sales, compared with an average of 3.9%.

The company's food mix remains in the mid single digits, well below Starbucks' 23% share.

Dutch Bros reported approximately 20% same-store sales growth in Texas in the first quarter, despite a 6-percentage-point year-over-year increase in the share of its stores operating within five miles of the closest 7 Brew location.

BofA noted that new units continue to open at higher volumes and that unit returns remain industry-leading.

Dutch Bros trades at 1.4 times its next-12-month valuation relative to the S&P 500, near a historical trough and almost 50% below its three-year historical relative multiple of 2.5 times.