CMB International Securities analyst Walter Woo maintained a Buy rating on Luckin Coffee yesterday and set a price target of $54.68.
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Walter Woo has given his Buy rating due to a combination of factors that suggest a promising outlook for Luckin Coffee. Despite a miss in the 3Q25 results primarily due to increased delivery costs, Woo sees this as a short-term issue with potential long-term benefits, as Luckin Coffee’s customer retention remains robust compared to its competitors. The company is expected to maintain positive same-store sales growth (SSSG) due to its unique growth drivers and an undemanding valuation, which supports the Buy rating.
Looking ahead to 4Q25E and FY26E, Woo anticipates continued sales growth and an improvement in delivery cost impacts. The acceleration in store expansion and a forecasted net profit growth of about 15% in 4Q25E further bolster the positive outlook. Additionally, Luckin Coffee’s strategic initiatives, such as category expansion and increased customer acquisition, are expected to drive growth. The company is also well-positioned to improve its gross profit margin and reduce delivery costs, enhancing its financial performance.