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Investing.com - TD Cowen has reiterated its Buy rating on Domino’s Pizza (NASDAQ:DPZ) with a price target of $510.00. The stock, currently trading at $474.60, has gained 11% year-to-date and appears overvalued according to InvestingPro Fair Value metrics.
The research firm cited improving execution for the pizza chain despite challenges in the quick service restaurant category. While Domino’s trades at a P/E ratio of 27.3x and high EBITDA multiple, TD Cowen believes patient investors should ultimately be rewarded. The company maintains strong profitability with a gross margin of 28.5%.
The firm expects Domino’s sales to accelerate in the second half of the year, driven by the March launch of stuffed crust pizza and the June partnership with DoorDash (NASDAQ:DASH).
TD Cowen views the company’s maintained 2025 guidance for 3% U.S. same-store sales growth as conservative, with the firm raising its own forecast to 3.5%.
The research note also highlighted an "emerging revamped chicken narrative" that could provide downside protection for the stock.
In other recent news, Domino’s Pizza reported its second-quarter 2025 earnings, which included a mixed performance in terms of earnings per share. The company announced earnings of $3.81 per share, slightly below the consensus estimate of $3.94. Despite this, Domino’s revenues exceeded expectations by $2 million. The pizza chain also reported better-than-expected same-store sales growth in both U.S. and international markets. Analysts have responded to these results with various updates. RBC Capital, BMO Capital, and UBS all maintained their positive ratings, with RBC Capital and BMO Capital setting price targets of $550 and $540, respectively. UBS noted strong sales momentum despite economic pressures. Benchmark and Loop Capital raised their price targets to $540 and $574, respectively, citing strong results and comparable sales. Domino’s maintained its 2025 guidance, anticipating approximately 8% operating income growth driven by global retail sales growth.
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