Restaurants Industry: Monthly restaurant spend data review through 4/26/26

Research evidence excerpt

Restaurants Industry: Monthly restaurant spend data review through 4/26/26

Dutch Bros (BROS)

Our $75 price objective denotes estimated fair value based on normalized earnings

power for BROS. We estimate that at $10.7 bn in sales and $2.9 bn in adjusted EBITDA

by 2034. Applying a 13x multiple and discounting back equates to a $75 fair value in one

year. We believe a 13x multiple is justified by Dutch Bros' long growth runway and high

returns, and we note it is comparable to other restaurants and retailers with similar

growth profiles that have sustained elevated earnings multiples over time.

Risks to our price objective: Dutch Bros could face execution risks to sustain a mid-teens

store growth rate which would impede the implied sales growth of our saturation

analysis. Margins and returns could also be lower-than-expected if Dutch Bros faces

greater margin pressures than anticipated.

First Watch (FWRG)

We believe FWRG should trade at a premium consistent with its faster growth and

higher returns. FWRG currently trades in line with its peer group of restaurants and

retailers with similar above-market growth rates. We believe a valuation in line with

other high growth peers is justified owing to FWRG's faster than average topline growth,

extended growth runway, as the brand goes national, and higher incremental returns,

with restaurant level ROIs of about 40% or 2x other full service restaurants. We apply a

10x multiple to our forward EBITDA estimates (2Q27-1Q28, $166.6mm) to arrive at our

$19 PO. This target multiple is conservative relative to high growth peers' average of

13x.

Downside risks: higher-than-expected cannibalization of existing restaurants due to new

store openings, staffing challenges and/or higher-than-expected wage inflation, higher-