11:37 AM EST, 11/06/2025 (MT Newswires) -- Dutch Bros ( BROS ) posted a Q3 beat partly driven by "impressive" new store performance despite ongoing margin pressure, Morgan Stanley said in a Thursday research report.

While unit expansion remains on track this year and in 2026, store margins came in lighter due to coffee costs and operating expenditures on new leases, which remain the same, with some "discrete" labor pressure in Q4, analysts wrote.

Commodities pose near-term cyclical pressure, while potential competition could emerge from Starbucks ( SBUX ) regaining its footing, according to the note.

The brokerage stated that it maintained its Q3 same-store sales growth guidance of 3.6%. For the full year, it expects SSS growth of 5% with revenue of about $1.62 billion.

The brokerage reiterated its overweight rating on the stock and lowered its price target $84 per share from $86.

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