On Thursday, RBC (TSX:RY) Capital Markets maintained a positive outlook on Domino's Pizza Inc. (NYSE:DPZ) stoc, reiterating an Outperform rating with a steady price target of $575.00.
The endorsement follows a recent Non-Deal Roadshow (NDR) in Toronto with the company's CEO Russell Weiner and VP of Investor Relations Greg Lemenchick. Discussions during the event focused on various topics including consumer health, pricing strategies, market share gains, and the profitability of franchisees.
The NDR provided insights into Domino's business strategies such as their carryout flywheel, newly introduced loyalty program, and third-party delivery partnerships. RBC Capital expressed increased confidence in the company's ability to grow franchisee profitability and to drive order growth. This optimism comes despite the current softer macroeconomic environment, suggesting that Domino's is well-positioned for long-term unit growth.
The financial firm highlighted Domino's potential to outperform competitors, especially in the face of a further economic slowdown. The company's strategic initiatives are seen as key drivers for market share gains, with the ability to sustain growth momentum over the long term.
Domino's Pizza's commitment to franchisee success and customer order growth were central to the conversations at the NDR. These elements are believed to underpin the company's resilience and competitive edge in the industry.
In summary, RBC Capital's reaffirmation of the Outperform rating and $575.00 price target for Domino's Pizza reflects a strong belief in the company's ongoing strategies and their expected positive impact on growth, even amid broader economic challenges.
In other recent news, Domino's Pizza has seen a series of positive developments. The company's earnings and revenue have been strong, with a 5.6% U.S. comparable sales increase reported for the first quarter.
This performance was driven by strategies such as the revamped rewards program and the expansion of its partnership with UberEats. The company's robust free cash flow growth, projected to have a compound annual growth rate of 13.2% from 2023 to 2026, was also noted by HSBC.
Several major firms have adjusted their outlook on Domino's. Goldman Sachs (NYSE:GS) initiated coverage with a Buy rating and a price target of $612, citing strong momentum from strategic initiatives.
Citi maintained a neutral stance, highlighting Domino's focus on everyday value, product innovation, and growth channels like third-party delivery. Wells Fargo (NYSE:WFC) and HSBC both raised their price targets for Domino's, acknowledging the company's strong first-quarter performance and robust growth prospects.
Domino's Pizza also plans to open new stores in the coming years and is expected to continue its share buyback program, repurchasing $1 billion worth of shares. These recent developments reflect the ongoing positive financial results and outlook for Domino's Pizza.
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