Benchmark raises Domino’s Pizza stock target to $535, keeps Buy rating

On Tuesday, Benchmark analyst Todd Brooks increased the price target on Domino’s Pizza (NASDAQ:DPZ) shares to $535 from $520, while sustaining a Buy rating on the stock. The stock currently trades at $493.82, with a market capitalization of $16.88 billion. According to InvestingPro data, 8 analysts have recently revised their earnings estimates upward for the upcoming period. The adjustment comes after Domino’s Pizza unveiled its first-quarter financial results on April 28, which revealed a slight dip in revenue, with figures at $1.11 billion against a projected $1.13 billion. The U.S. systemwide same-store sales (SSS) also showed a minor decline of 0.5%, compared to the anticipated 0.2% increase.

Despite these figures falling short of expectations, Domino’s Pizza experienced a stronger supply chain margin by 20 basis points, which helped to counterbalance the lower-than-expected adjusted earnings per share (EPS) of $3.99 and EBITDA of $231 million, both of which were marginally below the consensus estimates of $4.04 for EPS and $238 million for EBITDA. The company maintains strong fundamentals, with revenue growing at 5.07% over the last twelve months.

In the report, Domino’s Pizza confirmed that it is upholding all aspects of its previously issued guidance. This follows the planned closure of 200 units by Domino’s Pizza Enterprises, with the company still anticipating a net growth of nearly 800 new units for the fiscal year 2025. The analyst noted Domino’s Pizza’s potential for continued strong same-store sales performance, driven by loyalty programs, new product introductions, and the launch of DoorDash (NASDAQ:DASH) services, which may contribute to market share gains in a competitive selling environment focused on value.

Brooks highlighted the expectation of a return to more normal international unit growth rates and projected that Domino’s Pizza is poised to maintain its market dominance. The new price target of $535 is based on 21 times Benchmark’s revised FY26 EBITDA estimate of $1.11 billion for Domino’s Pizza. Currently trading at a P/E ratio of 28.06, InvestingPro analysis suggests the stock is trading above its Fair Value. Investors seeking deeper insights can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, which includes detailed valuation analysis and growth projections.

In other recent news, Domino’s Pizza has reported first-quarter earnings for 2025 that surpassed market expectations, with earnings per share (EPS) of $4.33, exceeding the consensus estimate of $4.06. This performance has led several financial firms to adjust their outlooks on Domino’s stock. BMO Capital Markets raised its price target to $540, maintaining an Outperform rating, while Loop Capital increased its target to $564, keeping a Buy rating. RBC Capital Markets also raised its price target to $550, continuing with an Outperform rating. UBS reaffirmed its Buy rating with a price target of $540, noting the company’s strategic initiatives aimed at improving sales in the second half of the year. Bernstein, on the other hand, maintained a Market Perform rating but raised the price target to $460, citing Domino’s effective management amidst economic challenges. Analysts have highlighted Domino’s strong international performance and strategic partnerships, such as the upcoming collaboration with DoorDash, as key drivers for future growth. Despite some challenges in U.S. same-store sales, Domino’s has reiterated its guidance for 2025, focusing on growth in global retail sales and operating income. These developments reflect a broad confidence in Domino’s ability to navigate the current economic landscape while maintaining its growth trajectory.

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