Key Takeaways

Wells Fargo kicked off coverage of two quick-service food and drink chains, Dutch Bros and Wingstop, with "buy" ratings Wednesday.

Dutch Bros ( BROS ), a cafe chain known for its drive-throughs, has a “disruptive strategy” and could be poised for “durable growth,” Wells Fargo analysts said. They gave the stock an $80 price target —slightly below the roughly $83 consensus target compiled by Visible Alpha and 14% above where the shares closed Tuesday.

Wells Fargo analysts are among several research teams that assessed Dutch Bros ahead of its scheduled investor conference Thursday, and highlight the potential of the company's plans to expand food offerings and mobile ordering. These initiatives could contribute to a 10% bump in the year ahead to average unit volume—or the typical sales generated at each store, Wells Fargo said.

“[Dutch Bros] business is [about] 90% drive-up today, and the concept consistently struggles with long lines during peak demand periods (aka morning & afternoon coffee rushes),” the analysts said, adding that recently added mobile ordering “has the potential to be a meaningful throughput unlock.”

Dutch Bros shares have more than doubled in value over the past year as the coffee company moved into new markets and opened its 1,000th store.

By contrast, Wingstop ( WING ) shares are down about 40% over the same period. However, Wells Fargo suggested its slide could offer investors an opportunity for “premium growth." The company's stock has slumped in recent months as a downbeat 2025 outlook and softer sales weighed on the stock, but Wells Fargo analysts said the chicken wing chain has strong potential.

The analysts gave Wingstop a $270 price target—nearly 23% above Tuesday's closing price, but below the roughly $321 consensus target from Visible Alpha.

Wingstop operates its shops more efficiently than other quick-service restaurants and knows how to gain market share with limited-time offerings, Wells Fargo said. It also has the opportunity to expand, especially internationally, the analysts said.

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