On Wednesday, Stifel maintained a positive stance on Domino's Pizza (NYSE:DPZ) shares, reiterating a Buy rating and a $480.00 price target. The firm's analysis acknowledges that the restaurant industry is facing increased headwinds, leading to a slight downward revision of same-store sales (SRS) projections for the second half of 2024.
Consequently, the full-year earnings per share (EPS) estimate for Domino's has been adjusted to $16.13, a minor decrease from the previous $16.18 estimate, yet still slightly below the consensus of $16.17.
Despite the reduced SRS forecast, Stifel's outlook for Domino's remains optimistic. The company is expected to outperform its competitors in the quick-service restaurant (QSR) pizza sector and is anticipated to capture additional market share. This confidence is underpinned by Domino's strategic efforts to stimulate comp growth, such as the recent introduction of the MOREflation promotion and the upcoming launch of a new product, Mac & Cheese, scheduled for next week.
The analyst highlighted that Domino's has been effectively implementing its growth strategies. The company's partnership with Uber (NYSE:UBER) Eats and the utilization of its loyalty program is projected to contribute to domestic SRS growth exceeding 3%. Despite the slight adjustment in the near-term forecast, Stifel's long-term expectations for the company remain unchanged, with a fiscal year 2025 (FY25) EPS estimate of $17.65.
The $480 price target set for the next 12 months reflects Stifel's continued confidence in Domino's Pizza's ability to navigate through industry challenges and capitalize on growth opportunities. The company's initiatives and partnerships are seen as key drivers for its future performance and market position.
In other recent news, Domino's Pizza has been the subject of various analyst adjustments following its second-quarter performance. TD (TSX:TD) Cowen lowered its price target for the company to $475, maintaining a Buy rating, due to anticipated slowdown in U.S. same-store sales. However, the firm expressed optimism for Domino's performance in 2025, anticipating benefits from a potential partnership with DoorDash (NASDAQ:DASH).
Baird also adjusted its price target to $535, while maintaining an Outperform rating, due to cautious remarks regarding the macroeconomic environment. Despite this, Baird expressed confidence in Domino's ability to meet its 2024 EBIT growth target of over 8%.
BMO (TSX:BMO) Capital reduced the stock's price target to $510 citing increased consumer pressures, yet remained optimistic about the company's multi-year growth prospects. Oppenheimer, while reducing its price target to $490, maintained an Outperform rating, highlighting Domino's competitive advantages and potential for above-peer unit growth.
RBC (TSX:RY) Capital Markets lowered its price target for Domino's Pizza to $500 from $575, while maintaining an Outperform rating. JPMorgan (NYSE:JPM) upgraded Domino's Pizza Enterprises Ltd from Underweight to Neutral, setting a new price target at AUD34.00, influenced by the company's solid financial results for fiscal year 2024.
These recent developments provide investors with a nuanced perspective on the company's future performance and potential.
InvestingPro Insights
As we delve into the financial health and market performance of Domino's Pizza (NYSE:DPZ), certain metrics from InvestingPro stand out. The company's market capitalization is robust at $14.45 billion, signaling a strong market presence. Despite concerns over industry headwinds, Domino’s has demonstrated resilience with its revenue growth, reporting a 2.28% increase over the last twelve months as of Q2 2024. This is complemented by a quarterly revenue growth of 7.14% for Q2 2024, indicating a positive trajectory amidst competitive pressures.
InvestingPro Tips reveal that Domino's has a track record of raising its dividend for 10 consecutive years and maintaining dividend payments for 13 consecutive years, reflecting a commitment to shareholder returns. Moreover, with analysts predicting profitability this year and a history of profitability over the last twelve months, the company’s financial stability is evident. It's worth noting that Domino's is trading at a high P/E ratio relative to near-term earnings growth, which may warrant attention from investors looking at valuation metrics.
For readers interested in a deeper dive, InvestingPro offers additional tips on Domino's Pizza, providing a more comprehensive understanding of the company's financial nuances and investment potential.
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