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Investing.com - Morgan Stanley (NYSE:MS) has reiterated an Overweight rating and $514.00 price target on Domino’s Pizza (NASDAQ:DPZ), citing better-than-expected results in both U.S. and international markets. Currently trading at $465.95, the stock sits between analyst targets ranging from $340 to $594, according to InvestingPro data.
The investment bank noted that Domino’s showed "material sequential improvement" in top-line performance that exceeded most market expectations, which should support the stock price. With revenue growth of 4.28% and a market capitalization of $15.95 billion, Morgan Stanley believes this positive momentum will continue through the next several quarters.
Despite the optimistic outlook for Domino’s, the firm acknowledged that investor views remain mixed, with caution persisting around the broader pizza segment. International unit growth fell slightly short of expectations due to ongoing closures, though gross openings remained strong. InvestingPro analysis shows the company maintains a GOOD financial health score, with 8 additional key insights available to subscribers.
Revenue aligned with forecasts despite better same-store sales, while earnings per share would have exceeded expectations when excluding the impact of China investments. The company’s restaurant-level margins were lower due to insurance and food costs.
Morgan Stanley highlighted that while most guided items should remain on track following the second quarter results, restaurant-level margins remain "under quite a bit of pressure" and could be a focus area moving forward.
In other recent news, Domino’s Pizza reported stronger-than-expected same-store sales growth in both U.S. and international markets, surpassing analyst expectations. The company achieved a 3.5% growth in U.S. comparable sales, outperforming Wall Street’s expectations, while international sales grew by 2.4%, exceeding forecasts. Despite the sales success, company margins declined, raising concerns about the impact of third-party delivery services. BMO Capital reiterated its Outperform rating, expecting Domino’s to meet or exceed upcoming earnings expectations, citing potential benefits from U.S. sales dynamics and supply chain margins. UBS maintained a Buy rating, anticipating strengthening U.S. sales momentum supported by key initiatives and new store growth. Melius Research initiated coverage with a Hold rating, recognizing Domino’s strong operational capabilities but noting limited near-term upside. Morgan Stanley raised its price target to $514, maintaining an Overweight rating, and highlighted the company’s successful partnership with DoorDash (NASDAQ:DASH) and the introduction of stuffed crust pizza.
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