Domino’s Pizza price target raised to $490 from $465 at Wells Fargo

Investing.com - Wells Fargo (NYSE:WFC) raised its price target on Domino’s Pizza (NASDAQ:DPZ) to $490 from $465 while maintaining an Equal Weight rating following the company’s second-quarter results. According to InvestingPro data, 13 analysts have recently revised their earnings estimates upward for the upcoming period, with price targets ranging from $340 to $594. The stock currently trades at a P/E ratio of 27, suggesting premium valuation levels relative to near-term earnings growth.

The pizza chain reported U.S. comparable sales growth of 3.4% in the quarter, reflecting higher traffic, 1.4% pricing increases, and higher check values driven by its Stuffed Crust offering. Delivery sales improved by 400 basis points quarter-over-quarter to 1.5%, while carryout sales grew 5.8% year-over-year, an improvement of 480 basis points from the previous quarter. The company’s revenue reached $4.78 billion in the last twelve months, with a gross profit margin of 28.5%.

International comparable sales slowed to 2.4%, declining 130 basis points from the previous quarter. The company’s global store count increased 2.9% year-over-year, with international locations growing 3.2% and U.S. locations up 2.3%.

On the margin front, Domino’s company-owned store gross margins declined 200 basis points year-over-year, impacted by a 100 basis point increase in food costs and 200 basis points in higher insurance expenses, partially offset by 100 basis points in lower labor costs. Supply chain margins improved by 50 basis points, primarily due to lower labor costs.

Domino’s reiterated its fiscal 2025 guidance, including U.S. comparable sales growth of 3% with stronger performance expected in the second half of the year as marketing for its DoorDash (NASDAQ:DASH) partnership ramps up. The company continues to expect 1-2% international comparable sales growth and plans to add approximately 175 net new U.S. stores and 615 net new international locations. InvestingPro analysis reveals the company has maintained dividend payments for 14 consecutive years, with a current dividend yield of 1.5%. For deeper insights into Domino’s financial health and growth prospects, including 8 additional exclusive ProTips, check out the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Domino’s Pizza reported its second-quarter 2025 earnings, which revealed a slight miss on earnings per share (EPS). The company posted an EPS of $3.81, falling short of the forecasted $3.94, representing a 3.3% negative surprise, while revenue matched expectations at $1.15 billion. Despite the EPS miss, Domino’s has seen positive analyst actions. Morgan Stanley (NYSE:MS) raised its price target to $520, maintaining an Overweight rating due to the company’s solid performance and key initiative execution. BTIG reiterated its Buy rating with a $530 price target, citing strong sales driven by the new Stuffed Crust offering and significant operating profit upside. Bernstein also raised its price target to $490, noting market share gains with domestic same-store sales growth of 3.4% and international growth of 2.4%. Citi maintained a Neutral rating and a $500 price target, acknowledging better-than-anticipated second-quarter performance and expected growth with third-party delivery integration. These developments highlight a mix of cautious optimism and strategic growth focus for Domino’s Pizza.

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