Key Highlights

● A brokerage cut its Dutch Bros target to $65 from $80 but kept outperform.

● The new target implies about 48% upside from the $44.01 opening price.

● Dutch Bros Revenue rose 32.5% to $550.85 million in its last reported quarter.

● Chairman Travis Boersma sold 145,687 shares on Oct. 20 under a pre-arranged plan.

Dutch Bros (NYSE:BROS) is in focus on Friday after a brokerage cut its price target on the drive-thru coffee chain to $65 from $80, according to market data. The brokerage kept its "outperform" rating. Even after the cut, the new target sits well above the stock's recent price: the data said the shares opened at $44.01 and put the implied upside at about 48%.

The details of the brokerage's reasoning were not included in the report. The cut fits a broader reset of restaurant forecasts by the firm on Friday. It also lowered its CAVA Group (NYSE:CAVA) target to $56 from $70 and cut its target on Dine Brands (NYSE:DIN), while raising its Texas Roadhouse (NASDAQ:TXRH) target to $220 from $190, according to market data.

The report header said Dutch Bros shares were trading up 2.5%, but it did not give a time, and no confirmed pre-market quote was available in other sources reviewed as of about 8:30 a.m. ET. The stock is therefore in focus rather than on a confirmed move.

A string of target cuts

The brokerage is not alone in turning more cautious. In recent weeks, one brokerage downgraded Dutch Bros to "sector perform" and cut its target to $46 from $70. Others have also lowered targets: one to $69 from $86, another to $55 from $59, a third to $75 from $85, and a fourth to $60 from $75, according to market data. Most of those firms still rate the stock a buy, and the consensus is "Moderate Buy" with an average target of $66.44.

The stock has had a rough year. Market data show a 52-week range of $36.51 to $74.02, and the shares sit below their 200-day Moving Average of $53.52, though above their 50-day average of $42.67. Valuation remains rich at about 61 times earnings, and a Beta of 2.31 means the shares tend to swing more than twice as much as the market.

Fundamentals have been solid. In its last reported quarter, released Aug. 5, Dutch Bros earned 33 cents a share against a 29-cent consensus, and revenue rose 32.5% to $550.85 million, according to market data. The gap between growing sales and a falling share price suggests investors are questioning how much they should pay for that growth.

Founded in 1992 in Grants Pass, Oregon, by brothers Dane and Travis Boersma, Dutch Bros sells coffee, energy drinks, teas and smoothies through drive-thru shops across the US. Its shares trade on the New York Stock Exchange and are part of the NYSE Composite, which tracks all common stock listed there.

Consumers, rates and what to watch

The macro backdrop is mixed for restaurant stocks. US third-quarter GDP grew at a 3.4% annualized pace, ahead of forecasts, but core PCE Inflation is still 3.1% year over year. The Federal Reserve, which hiked in September and held this week, sees about 85% odds of another hike in December, according to CME data cited in media reports. Higher gasoline prices, with WTI crude around $104 a barrel, can also squeeze spending by drive-thru customers.

Insider selling is another point investors watch. Chairman Travis Boersma sold 145,687 shares on Oct. 20 under a pre-arranged trading plan, according to market data. Insiders own about 38.9% of the company and institutions about 85.5%, so founder decisions and fund flows both carry weight for the stock.

Next, look for Dutch Bros' third-quarter results, which will show whether same-shop sales are holding up and whether the company keeps its expansion pace. Restaurant peers reporting in the coming weeks, along with the October jobs report on Nov. 6, will add to the picture of consumer demand.