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Why Coffee Stocks Like Starbucks And Dunkin’ Are Suddenly Piping Hot

From: fortune.com

Street is suddenly hot—on coffee stocks.

Dunkin’ shares have already risen 25% year to date, while Starbucks’ have risen 29%.

Dunkin’ Brands Group got an upgrade on Monday by Wedbush Securities from a ‘neutral’ rating to ‘outperform.’ The company’s new price target of $92 is 16% above Dunkin’s close on Friday at $79, and significantly higher than Wedbush’s previous target of $76 per share.

Wedbush analyst Nick Setyan (who upgraded the stock) told Fortune that both Dunkin’s same-store sales growth and unit growth had been decelerating for the past three years from consistent single digits to less than 1% and 2% respectively. But Setyan believes the company’s strong 1st quarter reports suggest improvement.

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