Citi Backs Dutch Bros as Expansion and Same-Store Sales Momentum Fuel Growth Outlook
Citi Sees Robust Growth Path for Dutch Bros, Initiates Coverage with Buy Rating
NEW YORK – In a bullish endorsement of the drive-through coffee chain's growth strategy, Citigroup has initiated coverage of Dutch Bros Inc. (NYSE: BROS) with a Buy rating and an $82 price target. Analysts at the firm highlighted the company's proven operational playbook for scaling across the United States, positioning it to capture market share even amid a cautious outlook for the broader coffee-away-from-home sector.
The investment thesis extends beyond a multi-year tailwind from brand awareness. Citi's report points to several upcoming catalysts expected to drive same-store sales momentum over the next 12 to 24 months, reinforcing the company's growth narrative.
Operational Momentum Continues into 2025
Dutch Bros' aggressive expansion remains a core engine for growth. The company entered six new states in 2025, including five during the third quarter alone, according to its latest earnings report. As of September 30, 2025, the chain operates 1,081 locations across 24 states. Management reported Q3 revenue of $424 million, a 25% year-over-year increase, underscoring the successful integration of new shops.
Looking ahead, the company has outlined an ambitious long-term plan to reach 2,029 shops by 2029, with approximately 175 new locations projected for 2026. Founded in 1992 and headquartered in Tempe, Arizona, Dutch Bros has achieved an average revenue growth of over 37% in the past three years, cementing its status as one of the fastest-growing players in the competitive food and beverage space.
Market Context and Analyst Commentary
Citi's optimistic stance contrasts with a more guarded view on the overall consumer discretionary spending environment. The analysts argue that Dutch Bros' "on-trend" concept—emphasizing convenience, speed, and a highly engaged customer community—provides a defensible moat. The chain's focus on drive-through, a format that gained permanent relevance post-pandemic, is seen as a key structural advantage.
Reader Reactions:
"Finally, some recognition for a company that's executing flawlessly. Their unit economics and cult-like customer loyalty are a textbook case of how to scale a regional brand nationally. The $82 target feels conservative if they maintain this pace." – Michael R., Portland, OR (Portfolio Manager)
"Another Wall Street cheerleader for an overvalued growth story. This is peak 'expansion for expansion's sake.' Let's see how those same-store sales hold up when the economy truly slows and they've saturated every street corner. The coffee bubble is real." – Sarah L., Chicago, IL (Independent Market Analyst)
"As a franchisee in the Southwest, the support and brand momentum are tangible. The national marketing is starting to click, and new product launches are driving consistent traffic. Citi's report aligns with what we're seeing on the ground." – David Chen, Phoenix, AZ (Multi-Unit Operator)
"Impressive numbers, but the valuation already prices in perfection. I'd wait for a pullback. There are too many macro headwinds for consumer stocks to jump in at these levels." – Priya V., New York, NY (Retail Investor)
The initiation of coverage by a major bank like Citi often brings increased institutional investor scrutiny and can provide a liquidity boost for the stock. For Dutch Bros, the endorsement serves as a validation of its growth strategy at a critical juncture in its national rollout.