On Tuesday, BMO (TSX:BMO) Capital Markets adjusted its outlook on Domino's Pizza (NYSE:DPZ), increasing the price target to $575 from $535, while maintaining an Outperform rating on the stock.
The revision follows Domino's Pizza's first-quarter earnings per share (EPS) of $3.58, surpassing the consensus estimate of $3.41. The company's performance was attributed to better-than-expected comparable store sales (comps), improved supply chain profits, and a reduced tax rate.
Domino's Pizza has confirmed its financial guidance for both 2024 and the longer term. The company's strategic initiatives appear to be yielding positive results across various customer segments, including the typically more economically challenged low-income consumers. This trend is expected to persist throughout the rest of 2024 and beyond.
According to BMO Capital, the strategies implemented by Domino's Pizza are creating widespread momentum. This success is anticipated to provide room for further positive revisions to the company's earnings projections. The firm's analysts have increased their own estimates and are confident in expanding their valuation assumption for the pizza chain's stock.
The raised target price reflects the belief that there is additional potential for Domino's Pizza to improve its margin outlook. As the company continues to execute its strategy effectively, BMO Capital sees a sustained opportunity for upward revisions to Domino's earnings per share.
Domino's Pizza's recent financial performance and the reaffirmation of its guidance demonstrate the company's ability to navigate the current market effectively. The raised price target by BMO Capital indicates a positive outlook on the stock's future performance.
InvestingPro Insights
Domino's Pizza (NYSE:DPZ) has been showing a robust performance, as highlighted by the recent earnings per share beat. To complement the analysis provided, InvestingPro data reveals key financial metrics that investors should consider. The company's market capitalization stands at a solid $18.36 billion, underscoring its significant presence in the market. Despite a slight dip in revenue growth over the last twelve months, quarterly figures show a healthy increase of 5.88%, indicating a rebound in sales. Additionally, Domino's Pizza boasts an impressive gross profit margin of 28.48%, reflecting efficient cost management and a strong pricing strategy.
In terms of stock performance, the company has experienced a significant return over the last week, with a 9.55% price total return. This momentum is part of a larger trend, with a 68.28% return over the past year, suggesting investor confidence in the company's growth prospects. Adding to this, two InvestingPro Tips highlight that Domino's Pizza has raised its dividend for 10 consecutive years, and the stock is currently trading near its 52-week high, which may interest income-focused investors and those looking for stocks with strong upward trends.
For those seeking deeper insights, InvestingPro offers additional tips, including analysis on the stock's earnings multiple and liquidity position. Investors can access these valuable tips by visiting https://www.investing.com/pro/DPZ and can benefit from an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 16 more InvestingPro Tips available, informed decisions are just a click away.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.