For the past few years, the assessment of coffee stocks on Wall Street has been simple: The upstart was winning. Dutch Bros (NYSE: BROS) ran circles around the incumbent, while Starbucks (NASDAQ: SBUX) stumbled through slumping sales and a leadership shake-up.
In 2026, the script flipped hard. Starbucks shares climbed sharply this year, while Dutch Bros slid somewhat. The question now is whether the elephant can keep stepping on the challenger through the back half of the year.
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The turnaround is real, and it has a name: "Back to Starbucks," the plan led by CEO Brian Niccol. After a long stretch of falling traffic, Starbucks coaxed customers back into its cafes, posting positive comparable sales after several quarters of declines and, crucially, seeing morning visits recover across the U.S.
The company credits simple, unglamorous fixes. These include better staffing, faster service, and a renewed focus on the in-store experience. They have helped bring some of the regulars back. When a business this size gets its foot traffic moving in the right direction again, the momentum tends to feed on itself. And management has grown confident enough to raise its outlook for the year.
Here's the twist worth appreciating: Dutch Bros' business is still humming. Revenue jumped more than 30% in its most recent quarter, and the company is opening well over 180 new shops this year as it marches toward more than 2,000 locations by the end of the decade.
Its stock fell not because sales cratered, but because the shares had run up so far that any cooling in enthusiasm, plus a jittery market for high-growth names, was enough to knock them down. In other words, this is a valuation reset for Dutch Bros.
For the next six months, I lean toward Starbucks being a better buy. Its turnaround has visible momentum and clear near-term catalysts; its huge scale and dividend offer some ballast; and its international runway, especially in China, gives it room to grow. That combination makes it the steadier bet for the second half.
But steadier isn't the same as having higher upside. Dutch Bros, after its pullback, is the more interesting long-term growth story, with a store count that could multiply over the coming years. The risks cut both ways: Starbucks may have already priced in much of the good news after this year's run, while Dutch Bros still trades at a premium and must execute a rapid, unproven national expansion.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
