SunOpta expanded Starbucks pact affirms Buy thesis, says DA Davidson

After SunOpta (STKL) issued a press release announcing an expansion of its Dream Oatmilk Barista product with a “large coffee chain” described as its largest customer, DA Davidson identifies that customer as Starbucks (SBUX) and argues that the expansion is material for two reasons. One, it validates the business development pipeline management has spoken to, and two it should provide increased confidence looking out to FY25, when the expanded distribution begins to contribute, according to the analyst, who says the expanded pact reaffirms the firm’s “incursion through conversion” thesis. The firm, which keeps a Buy rating and $9 price target on SunOpta shares, adds that is “comfortable buying on strength.”