McDonald's Plans New Beverage, Dutch Bros and Black Rock Coffee Shares Slip
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy BROS?
Shares of Dutch Bros (BROS) and Black Rock Coffee Bar (BRCB) were slipping in afternoon trading after the Wall Street Journal reported that McDonald's (MCD) is planning to offer a Red Bull Dragonberry Energizer as part of a broader overhaul of its menu of cold drinks at its U.S. restaurants later this year. The new beverages, which are anticipated to be priced below those of rivals such as Dutch Bros and Black Rock Coffee, are expected to be sold starting in August of this year. Shares of Dutch Bros are down 2.8% in afternoon trading, while Black Rock Coffee Bar shares are 3% lower.
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Analyst Views on BROS
Wall Street analysts forecast BROS stock price to rise
10 Analyst Rating
10 Buy
0 Hold
0 Sell
Strong Buy
Current: 52.110
Low
70.00
Averages
78.80
High
85.00
Current: 52.110
Low
70.00
Averages
78.80
High
85.00
About BROS
Dutch Bros Inc. is an operator and franchiser of drive-thru shops, which is focused on serving hand-crafted beverages. The Company sells a range of customizable hot, iced and blended beverages. Coffee-based beverages include handcraft espresso shots for both hot and cold custom classic and signature coffee beverages. It also sells proprietary coffee-based Freeze blended beverages and cold brew. Its Private Reserve coffee is a 100% Arabica three-bean blend, roasted by the Company in Grants Pass, Oregon or Melissa, Texas facilities. The Company has two segments: Company-operated shops, and Franchising and other. The Company-operated shops segment includes retail coffee shop sales to end consumers. The Franchising and other segment includes bean and product sales to franchise partners and includes the initial franchise fees, royalties, and marketing fees. It has approximately 1,101 shops, of which over 779 are operated by the Company and 322 are franchised, across 26 states.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Dutch Bros Faces Rising Coffee Cost Pressures Amid Growth
- Performance Pressure: Dutch Bros anticipates a 60 basis point pressure on its adjusted EBITDA margin for 2026, primarily due to rising coffee costs and increased occupancy expenses, which will negatively impact profitability.
- Expansion Plans: As of the end of 2025, Dutch Bros operated 1,136 coffee shops across 25 states and aims to open at least 181 new locations in 2026; while this will raise occupancy costs, it is viewed as crucial for future financial growth.
- Revenue Growth Expectations: Consensus analyst estimates project Dutch Bros to achieve a 25% compound annual growth rate in revenue over the next three years, with adjusted earnings per share expected to rise by 27% annually, indicating strong market potential.
- Coffee Cost Volatility: Although coffee prices have decreased by 22% in the past year, they remain double the price from five years ago; Dutch Bros' CFO noted that coffee costs account for 10% of the company's cost of goods sold and believes that the volatility is temporary, with normalization expected in the future.
See More
Dutch Bros Shifts to Build-to-Suit Leases Amid Rising Costs
- Lease Transition: Dutch Bros is shifting its leases to build-to-suit arrangements, which will increase occupancy costs; however, management believes this strategy will support future expansion plans, with a goal of opening 181 new locations in 2026.
- Coffee Cost Pressure: Due to coffee price volatility, Dutch Bros expects a 60 basis point pressure on adjusted EBITDA margins, with a 200 basis point headwind in the first quarter primarily from rising coffee costs, potentially impacting short-term profitability.
- Expansion Plans: As of the end of 2025, Dutch Bros had 1,136 coffee shops nationwide, and management sees significant market potential, aiming for 7,000 shops in the U.S., with projected revenue growth of 25% CAGR over the next three years.
- Investor Confidence: Despite near-term margin pressures, management remains optimistic about coffee cost fluctuations, viewing them as temporary; in the long run, sustained expansion and healthy store performance are expected to enhance overall profitability.
See More
Trump Threatens 50% Tariff on China Amid Trade Tensions
- Tariff Threat Escalation: President Trump threatened a staggering 50% tariff on China during a Fox News interview, which could significantly impact multinational companies like Apple that rely heavily on Chinese supply chains, further escalating trade tensions.
- Increased Economic Risks: This tariff threat not only poses operational challenges for global retail giants like Nike but also raises investor concerns about the economic repercussions of the ongoing Middle East conflict, adding layers of uncertainty to the market.
- Market Reaction: Although Trump labeled the underlying reports as potentially 'fake news', the market's reaction indicates a heightened sensitivity among investors regarding future trade relations, which could lead to increased volatility in stock prices.
- Geopolitical Implications: Against the backdrop of rising tensions in the Middle East, Trump's tariff threat introduces new risks to the global economy, potentially affecting U.S.-China diplomatic relations and their competitiveness in international markets.
See More
Investment Opportunities in Costco and Dutch Bros
- Costco Financial Performance: In the first half of fiscal 2026, Costco reported revenues of $137 billion, a 9% increase year-over-year, while profits surged 13% to $4 billion, demonstrating the company's strong resilience amid economic uncertainties.
- Valuation Analysis: Despite Costco's P/E ratio standing at 53, significantly above the five-year low of 40, historical trends suggest that if the P/E drops below 30, investors could achieve market-beating returns, indicating potential overvaluation risks at current prices.
- Dutch Bros Expansion Plans: By the end of 2025, Dutch Bros had 1,136 locations and plans to open 2,029 new stores by 2029, which is expected to drive its revenue to exceed $1.6 billion in 2025, reflecting a robust growth trajectory of 28%.
- Market Competitiveness: Although Dutch Bros has a high P/E ratio of 84, its price-to-sales ratio of 4.3 has recently declined, and if it falls below Starbucks' 2.9, historical data suggests a potential surge in stock price, offering investors a chance for market outperformance.
See More
Middle East Conflict Affects Investor Sentiment
- Cautious Market Sentiment: Amid rising geopolitical tensions from the Middle East conflict, investors are reducing stock holdings or delaying purchases, reflecting uncertainty about future market performance, which could negatively impact overall market dynamics.
- Costco Financial Performance: In the first half of fiscal 2026, Costco reported $137 billion in revenue, a 9% increase year-over-year, with profits reaching $4 billion, up 13%, demonstrating resilience amid economic uncertainty, although its 53 P/E ratio may no longer be justified.
- Dutch Bros Expansion Plans: Dutch Bros achieved over $1.6 billion in revenue in 2025, a 28% increase, and plans to open 2,029 new locations by 2029, showcasing its rapid expansion potential; despite a high P/E ratio of 84, investors remain hopeful for future returns.
- Investment Opportunity Assessment: In light of a potential bear market, investors are advised to compile a wish list of stocks to buy if prices fall, particularly considering the potential value in Costco and Dutch Bros, which may offer market-beating returns.
See More
Dutch Bros Restaurant Chain Sees Strong Growth
- Same-Store Sales Recovery: While Starbucks experienced a 2% decline in same-store sales in fiscal 2025, Dutch Bros achieved a 5.6% increase for the year, culminating in a 7.7% rise in the fourth quarter, indicating strong operational performance in its core business.
- Store Expansion Momentum: Dutch Bros increased its store count by 16% in 2025, driving a remarkable 29% revenue growth, which highlights the effectiveness of its rapid expansion strategy in enhancing market share and brand presence.
- Significant Market Opportunity: With only 1,136 coffee shops compared to Starbucks' 40,000, Dutch Bros has substantial growth potential, particularly in the quick-service restaurant sector, suggesting room for further expansion.
- Investor Sentiment Fluctuations: Dutch Bros' stock has fallen over 25% from its 52-week high, yet given its strong business performance, aggressive investors may find it appealing, though they should monitor same-store sales and overall revenue for a comprehensive view of the company's performance.
See More
Dutch Bros Faces Rising Coffee Cost Pressures Amid Growth
- Performance Pressure: Dutch Bros anticipates a 60 basis point pressure on its adjusted EBITDA margin for 2026, primarily due to rising coffee costs and increased occupancy expenses, which will negatively impact profitability.
- Expansion Plans: As of the end of 2025, Dutch Bros operated 1,136 coffee shops across 25 states and aims to open at least 181 new locations in 2026; while this will raise occupancy costs, it is viewed as crucial for future financial growth.
- Revenue Growth Expectations: Consensus analyst estimates project Dutch Bros to achieve a 25% compound annual growth rate in revenue over the next three years, with adjusted earnings per share expected to rise by 27% annually, indicating strong market potential.
- Coffee Cost Volatility: Although coffee prices have decreased by 22% in the past year, they remain double the price from five years ago; Dutch Bros' CFO noted that coffee costs account for 10% of the company's cost of goods sold and believes that the volatility is temporary, with normalization expected in the future.
See More
Dutch Bros Shifts to Build-to-Suit Leases Amid Rising Costs
- Lease Transition: Dutch Bros is shifting its leases to build-to-suit arrangements, which will increase occupancy costs; however, management believes this strategy will support future expansion plans, with a goal of opening 181 new locations in 2026.
- Coffee Cost Pressure: Due to coffee price volatility, Dutch Bros expects a 60 basis point pressure on adjusted EBITDA margins, with a 200 basis point headwind in the first quarter primarily from rising coffee costs, potentially impacting short-term profitability.
- Expansion Plans: As of the end of 2025, Dutch Bros had 1,136 coffee shops nationwide, and management sees significant market potential, aiming for 7,000 shops in the U.S., with projected revenue growth of 25% CAGR over the next three years.
- Investor Confidence: Despite near-term margin pressures, management remains optimistic about coffee cost fluctuations, viewing them as temporary; in the long run, sustained expansion and healthy store performance are expected to enhance overall profitability.
See More
Trump Threatens 50% Tariff on China Amid Trade Tensions
- Tariff Threat Escalation: President Trump threatened a staggering 50% tariff on China during a Fox News interview, which could significantly impact multinational companies like Apple that rely heavily on Chinese supply chains, further escalating trade tensions.
- Increased Economic Risks: This tariff threat not only poses operational challenges for global retail giants like Nike but also raises investor concerns about the economic repercussions of the ongoing Middle East conflict, adding layers of uncertainty to the market.
- Market Reaction: Although Trump labeled the underlying reports as potentially 'fake news', the market's reaction indicates a heightened sensitivity among investors regarding future trade relations, which could lead to increased volatility in stock prices.
- Geopolitical Implications: Against the backdrop of rising tensions in the Middle East, Trump's tariff threat introduces new risks to the global economy, potentially affecting U.S.-China diplomatic relations and their competitiveness in international markets.
See More
Investment Opportunities in Costco and Dutch Bros
- Costco Financial Performance: In the first half of fiscal 2026, Costco reported revenues of $137 billion, a 9% increase year-over-year, while profits surged 13% to $4 billion, demonstrating the company's strong resilience amid economic uncertainties.
- Valuation Analysis: Despite Costco's P/E ratio standing at 53, significantly above the five-year low of 40, historical trends suggest that if the P/E drops below 30, investors could achieve market-beating returns, indicating potential overvaluation risks at current prices.
- Dutch Bros Expansion Plans: By the end of 2025, Dutch Bros had 1,136 locations and plans to open 2,029 new stores by 2029, which is expected to drive its revenue to exceed $1.6 billion in 2025, reflecting a robust growth trajectory of 28%.
- Market Competitiveness: Although Dutch Bros has a high P/E ratio of 84, its price-to-sales ratio of 4.3 has recently declined, and if it falls below Starbucks' 2.9, historical data suggests a potential surge in stock price, offering investors a chance for market outperformance.
See More
Middle East Conflict Affects Investor Sentiment
- Cautious Market Sentiment: Amid rising geopolitical tensions from the Middle East conflict, investors are reducing stock holdings or delaying purchases, reflecting uncertainty about future market performance, which could negatively impact overall market dynamics.
- Costco Financial Performance: In the first half of fiscal 2026, Costco reported $137 billion in revenue, a 9% increase year-over-year, with profits reaching $4 billion, up 13%, demonstrating resilience amid economic uncertainty, although its 53 P/E ratio may no longer be justified.
- Dutch Bros Expansion Plans: Dutch Bros achieved over $1.6 billion in revenue in 2025, a 28% increase, and plans to open 2,029 new locations by 2029, showcasing its rapid expansion potential; despite a high P/E ratio of 84, investors remain hopeful for future returns.
- Investment Opportunity Assessment: In light of a potential bear market, investors are advised to compile a wish list of stocks to buy if prices fall, particularly considering the potential value in Costco and Dutch Bros, which may offer market-beating returns.
See More
Dutch Bros Restaurant Chain Sees Strong Growth
- Same-Store Sales Recovery: While Starbucks experienced a 2% decline in same-store sales in fiscal 2025, Dutch Bros achieved a 5.6% increase for the year, culminating in a 7.7% rise in the fourth quarter, indicating strong operational performance in its core business.
- Store Expansion Momentum: Dutch Bros increased its store count by 16% in 2025, driving a remarkable 29% revenue growth, which highlights the effectiveness of its rapid expansion strategy in enhancing market share and brand presence.
- Significant Market Opportunity: With only 1,136 coffee shops compared to Starbucks' 40,000, Dutch Bros has substantial growth potential, particularly in the quick-service restaurant sector, suggesting room for further expansion.
- Investor Sentiment Fluctuations: Dutch Bros' stock has fallen over 25% from its 52-week high, yet given its strong business performance, aggressive investors may find it appealing, though they should monitor same-store sales and overall revenue for a comprehensive view of the company's performance.
See More
