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On Tuesday, Benchmark analyst Todd Brooks confirmed a Buy rating on Domino’s Pizza (NASDAQ:DPZ) shares, maintaining the $520.00 price target. The endorsement comes after the pizza chain reported its fourth-quarter earnings for 2024, which delivered mixed results. Domino’s revenue for the quarter was slightly lower than expected, coming in at $1.44 billion compared to the $1.48 billion consensus. According to InvestingPro data, the company maintains strong profitability with a 28.4% gross margin and has demonstrated consistent dividend growth, with payments maintained for 14 consecutive years. This was partly due to U.S. systemwide same-store sales (SSS) growing by only 0.4%, which fell short of the anticipated 1.1%.
Despite these revenue and SSS figures not meeting expectations, Domino’s saw better-than-anticipated supply chain margins and reduced general and administrative (G&A) expenses. These factors contributed to the company’s adjusted earnings per share (EPS) of $4.89, just slightly below the consensus forecast of $4.91. Similarly, earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $299 million, narrowly missing the $300 million target.
Looking ahead, Domino’s has set its sights on matching the 5.9% global retail sales growth seen in the fiscal year 2024 for the upcoming fiscal year 2025. The company is also aiming for an 8% increase in operating income for FY25, though these projections do not account for an estimated foreign exchange impact of 100-200 basis points. With a robust return on assets of 34.2% and strong cash generation, as revealed by InvestingPro data, the company appears well-positioned to pursue its growth targets. Subscribers can access 8 additional ProTips and comprehensive financial metrics in the Pro Research Report. Additionally, the planned closure of 205 units by Domino’s Pizza Enterprises in the first half of 2025 is expected to be offset by a net growth of nearly 800 units for the year.
Brooks highlighted that despite the temporary deceleration in international unit growth, Domino’s continues to achieve same-store sales performance and market share gains in a cost-conscious consumer environment. With these factors in mind, Benchmark has decided to stand by its Buy rating and $520 price target for Domino’s Pizza stock, which is based on 20 times the firm’s newly estimated FY26 EBITDA of $1.12 billion. The company’s financial health score of "GOOD" from InvestingPro supports this positive outlook, though investors should note that 12 analysts have recently revised their earnings expectations downward for the upcoming period.
In other recent news, Domino’s Pizza has been the focus of several analyst reports following its fourth-quarter earnings. BMO Capital Markets raised its price target for Domino’s to $515, maintaining an Outperform rating, after the company reported earnings per share (EPS) of $4.89, which met consensus expectations. Meanwhile, Loop Capital adjusted its price target slightly down to $555, retaining a Buy rating, as the EPS was marginally below their expectations. Evercore ISI also maintained an Outperform rating with a $480 price target, anticipating strong same-store sales growth in the latter half of 2025 due to new marketing strategies and product offerings.
RBC Capital Markets reiterated its Outperform rating with a $500 price target, acknowledging the company’s fourth-quarter results fell short of expectations but expressing confidence in Domino’s ability to navigate challenges. Bernstein maintained a Market Perform rating with a $440 target, noting Domino’s market share gains and cost discipline despite ongoing challenges. Domino’s guidance for 2025 indicates a consistent global retail sales growth of around 6% and an 8% increase in operating profit, with U.S. same-store sales projected to grow by 3%.
The company plans to expand its partnerships with delivery aggregators, following the end of Uber (NYSE:UBER)’s exclusive agreement, which is seen as a potential catalyst for growth. Despite some concerns about international growth and consumer demand pressures, analysts generally express optimism about Domino’s strategic direction and operational efficiency. These developments highlight the mixed but generally positive sentiment among analysts regarding Domino’s future prospects.
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