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Investing.com - RBC Capital has lowered its price target on Domino’s Pizza (NYSE:DPZ) Enterprises Ltd. (ASX:DMP) to AUD18.00 from AUD30.00 while maintaining a Sector Perform rating following the unexpected resignation of CEO Mark Van Dyck.
The CEO’s departure after taking the role just last November has created significant uncertainty regarding the company’s future strategic direction and medium-term earnings outlook, according to RBC Capital.
The investment firm reduced its earnings estimates to reflect a more pessimistic long-term outlook for Domino’s operations in Europe and Asia, contributing to the 40% reduction in price target.
RBC Capital noted that while Domino’s stock appears "cheap" relative to peers and its 5-year trading history, the company faces both cyclical and potential structural challenges that could present downside risk to future earnings.
The price target reduction comes at a challenging time for quick-service restaurant operators, which are broadly under pressure in the current market environment.
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