Analyst Walter Woo from CMB International Securities maintained a Buy rating on Luckin Coffee and increased the price target to $44.95 from $40.61.
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Walter Woo has given his Buy rating due to a combination of factors that highlight Luckin Coffee’s strong performance and growth potential. The company’s sales have been robust, with a significant increase expected in the second half of 2025, despite rising costs such as delivery expenses and potential subsidies for franchisees. This growth is supported by impressive gross profit margin improvements, which have been achieved despite challenges like coffee bean price inflation.
New product launches, such as fruit-based beverages, have been well-received, contributing to the company’s growth by meeting new consumer demands. Additionally, Luckin Coffee has seen substantial client acquisition and activation, with a notable increase in monthly transacting customers. This is attributed to effective customer retention strategies and a seamless customer experience. Given these factors and the company’s attractive valuation, Woo maintains a Buy rating for Luckin Coffee.