Chart of the Day: Is Any Bad News Already Baked In Before Earnings?
This stock has fallen sharply, but big money managers could be buying it under the radar.
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After the close Wednesday we will hear from Dutch Bros BROS as the company tries to pull off a third straight winning (beating estimates) quarter. The bar is high, as one would expect, following a couple of blowout earnings in February and November. But since the February report the stock has faded considerably.
Certainly worries over the economy slowing and spending habits of consumers is something to consider, along with extremely high input prices such as coffee, which is up 33% in 2025. Dutch Bros is working to diversify into food and other products, and that may help spread out some risk, but the core is coffee and as expenses rise then margins go down. However, we'll wait for the earnings report for more color on this.
As for the chart, it is leaning bearish except for money flow, which makes us think big money managers are buying this stock under the radar. The price chart is bearish as it reflects pink/purple candles (according to the GoNoGo composite of indicators). The parabolic SAR (stop and reverse) is bullish but ADX is way down so there is really no trend here.
That is pretty evident just by examining the price chart. Which way it goes is anyone's guess here but a move above recent highs ($63) sets up a move to those February highs eventually. This sideways action will have to end soon.
We like BROS in TheStreet Pro Portfolio and rate it a Two, or "stockpile on pullbacks."
At the time of publication, TheStreet Pro Portfolio was long BROS.
