Dutch Bros. stock upgraded by JP Morgan after sell-off

Yahoo Finance Live anchors discuss JP Morgan Chase upgrading Dutch Bros. stock to Overweight.

Video Transcript

JULIE HYMAN: All right, let's talk coffee. OK? Dutch Bros.

BRIAN SOZZI: My fave.

JULIE HYMAN: A bit of a perk up. I'm watching shares of Dutch Brothers this morning. Dutch Bro-- is it technically Dutch Bros?

BRIAN SOZZI: I think it's a Brooke DiPalma trade right there, Dutch Bros.

JULIE HYMAN: I think Dutch Bros, right. It is up a little bit after JPMorgan Chase upgraded the stock to overweight with a $38 price target. What's interesting here is the stock was up earlier as much as 5%, so it's actually, we've seen that-- those gains come back a little bit. But the analyst there at JP Morgan saying the selloff has made it attractive, cites the chain's permanence over time through differentiated drinks.

Some interesting stuff here-- 56% of customers under 25 drink 80% cold beverages and 60% of sales after noon. And that's sort of more discretionary. So maybe that's a little bit more vulnerable. I don't know-- I guess not. Everybody's complaining about insomnia. You'd think if you're drinking a giant cold brew afternoon. Could be also you're looking at your phone for the two hours before bed. That doesn't help either.

But I digress. The point is here is that the analyst at JP Morgan likes Dutch Bros and says that employment and stable gas prices are key to more predictable sales here, but that the company is in decent position here. And it has the capital it needs to grow the business.

BRIAN SOZZI: I think I'm going to-- I need to take off a couple of days from the office and just visit a Dutch Bros. Maybe it'll be my vacation. I see all the photos posted on Instagram, on Twitter. People are obsessed with Dutch Bros coffee. It looks beautiful. And I think it more caffeine, in some cases, depending on what you order, than Starbucks. That's where I'm going on vacation. I'm going to go visit a Dutch Bros.

JULIE HYMAN: No, no, no, wait.

BRIAN SOZZI: I'm going to go visit a Dutch Bros.

JULIE HYMAN: OK, everybody, can we clip this, please? Brian Sozzi just promised he is going to take a vacation.

BRIAN SOZZI: I suggested.

JULIE HYMAN: Promise-- that's a promise.

BRIAN SOZZI: I suggested it.

JULIE HYMAN: He said it on air.

BRIAN SOZZI: I'm going to go visit Dutch Bros, and I'm going to report from outside of Dutch Bros with my phone.

JULIE HYMAN: You're not allowed to log on or come on camera while you're on vacation.