Strong Q1 2025 Performance and Strategic Moves Bolster Luckin Coffee’s Growth Potential: Buy Rating Affirmed

CMB International Securities analyst Walter Woo maintained a Buy rating on Luckin Coffee (LKNCY – Research Report) today and set a price target of $40.61.

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 first-quarter results in 2025 exceeded expectations, with a significant increase in sales driven by better-than-expected same-store sales growth and rapid store expansion. The gross profit margin also surpassed estimates, benefiting from an improved product mix and enhanced operational efficiencies.
Despite some challenges, such as increased share-based compensation and a higher tax rate, Luckin Coffee’s net profit showed a remarkable recovery compared to the previous year. The company also demonstrated healthy customer growth and improved customer retention, with a notable increase in average monthly customers and sales per transacting customer. Additionally, Luckin Coffee’s strategic move to secure an exclusive coconut supply in Indonesia positions it well for future overseas expansion, further supporting Woo’s optimistic outlook for the company’s continued success.

According to TipRanks, Woo is an analyst with an average return of -5.2% and a 36.73% success rate. Woo covers the Consumer Cyclical sector, focusing on stocks such as Li Ning Company, Luckin Coffee, and ANTA Sports Products.