Domino’s Pizza stock holds $490 target, buoyed by store openings

On Monday, TD Cowen reaffirmed a positive outlook on Domino’s Pizza (NASDAQ:DPZ) shares, maintaining a Buy rating and a $490.00 price target. Currently trading at $458.12, InvestingPro analysis suggests the stock is currently overvalued, though analyst targets range from $414 to $555. The endorsement follows an analysis of Domino’s Franchise Disclosure Document, which suggests a robust expansion plan for the current year. The document indicates that the combined number of projected new franchised outlets and franchise agreements not yet opened could lead to 210 new domestic store openings in 2025. This number surpasses TD Cowen’s own estimate of 181 new locations. With a market capitalization of $15.72 billion and revenue growth of 5.07% in the last twelve months, Domino’s continues to demonstrate strong market presence.

The analyst highlighted that while detailed insights into store openings versus closings are not provided by Consensus Metrix, their data implies approximately 179 gross U.S. franchise openings by the end of 2025, based on the anticipated increase in U.S. franchise locations from 6,722 at the end of 2024 to 6,893 at the end of 2025. This figure is close to TD Cowen’s projection and notably higher than the net increase, which accounts for an estimated 8 franchise closures in 2025.

TD Cowen has decided to stand by its estimate of 181 gross new U.S. franchise openings for 2025, which aligns closely with Domino’s ongoing annual guidance suggesting a minimum of 175 new openings. InvestingPro data reveals the company maintains strong profitability metrics, with a P/E ratio of 27.14 and impressive return on assets of 34.24%. Subscribers can access 8 additional exclusive ProTips and comprehensive financial analysis through the Pro Research Report. The firm’s analysis appears to reinforce confidence in the growth trajectory of Domino’s Pizza, as the number of anticipated openings indicates a potential for expansion beyond both the company’s guidance and the consensus estimate.

Domino’s Pizza’s expansion strategy, as inferred from the Franchise Disclosure Document, showcases the company’s ambition to increase its domestic presence significantly in 2025. The forecasted store openings, if realized, could position the pizza chain for a solid year of growth within the U.S. market.

The reiterated Buy rating and price target by TD Cowen signal a steady confidence in Domino’s Pizza’s performance and growth prospects. With an analyst consensus recommendation of 1.94 (where 1 is Strong Buy and 5 is Strong Sell), the broader market shares this optimistic outlook. The firm’s analysis underscores the potential for Domino’s to exceed expectations in its U.S. franchise development efforts for the year.

In other recent news, Domino’s Pizza has been the focus of several analyst reviews and company updates. UBS analyst Dennis Geiger reaffirmed a Buy rating on Domino’s shares, maintaining a $540 price target, following mixed fourth-quarter results. The company’s expectations for 2025 include a 3% increase in U.S. same-store sales and a 1-2% rise in international same-store sales, with an emphasis on upcoming U.S. sales initiatives. Stifel also maintained a Buy rating with a $500 target, noting confidence in Domino’s market share growth despite weaker consumer spending. Meanwhile, Bernstein held a Market Perform rating with a $440 target, highlighting the resilience of Domino’s franchise model amidst economic pressures.

In addition to analyst insights, Domino’s Pizza announced key executive promotions, with Joseph Jordan appointed as chief operating officer and president of Domino’s U.S. This reshuffle aims to enhance global operations and streamline the company’s strategic focus. The company also launched its first-ever Parmesan stuffed crust pizza, which is part of a broader strategy to drive growth through product innovation and partnerships. Analysts have emphasized that these initiatives, including digital investments and loyalty programs, are designed to support continued sales growth. As Domino’s navigates current economic challenges, its strategic plans for innovation and market share expansion remain central to its outlook.

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