JPMorgan Starts Luckin Coffee (LKNCY) at Overweight

JPMorgan analyst Jessie Xu initiates coverage on Luckin Coffee (OTC: LKNCY) with a Overweight rating and a price target of $55.00.

The analyst comments: "With its old story behind it (debt restructuring completed in Mar-2022), the “new” Luckin Coffee surprised the market again from 2022. Store openings accelerated in 2022 (+2.2k), further lifted to 8k in 2023, reached 6k in 2024, and then 6.8k in 2025 (JPMe). By Jun-2025, Luckin had a total of 26k coffeehouses (17k self-operated and 9k partnership stores), more than 3x Starbucks’ store count in China.

We like Luckin for its consumer-centered vision, market-share-oriented growth strategy, and strong digitalization. Given these factors, we assign 1x PEG to value Luckin but apply a 30% discount considering its limited track record and constraints on liquidity. Our target price of US$55 implies 18x 2027E P/E. The stock has traded at 16x 12-month rolling P/E on average since 2022. We forecast a 19% store expansion CAGR to support a 23% revenue CAGR and 26% earnings CAGR during 2024-2027E. Steady and fast expansion, new product launches and margin beats might continue to support consensus upgrades. Our PT of US$55 implies 45% potential upside. Luckin is one of our top picks in the China FMD sector."

For an analyst ratings summary and ratings history on Luckin Coffee click here. For more ratings news on Luckin Coffee click here.

Shares of Luckin Coffee closed at $38.08 yesterday.

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