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On Tuesday, Evercore ISI maintained a positive outlook on Domino’s Pizza (NASDAQ:DPZ) shares, reiterating an Outperform rating and a $480.00 price target. Currently trading at $455.64, the stock sits slightly above its InvestingPro Fair Value, with analyst targets ranging from $402 to $559. The firm’s analysts highlighted a potential for strong same-store sales (SSS) growth in the second half of 2025, driven by new marketing strategies and product offerings.
Domino’s Pizza’s core U.S. delivery business experienced a slight decline of approximately 1.5% in the fourth quarter of 2024. This dip included a roughly 2.5 percentage point contribution from the company’s partnership with UberEats, which helped to balance out the growth in carryout orders. The company maintains strong fundamentals with a 28.4% gross profit margin and has demonstrated consistent dividend growth, raising payments for 11 consecutive years according to InvestingPro. As the impact from UberEats begins to wane, Evercore ISI anticipates a return to mid-single-digit SSS growth, with expectations of a 4% increase, slightly above the consensus estimate of 3.5%.
The anticipated growth is expected to kick off in the latter half of 2025 with the introduction of DoorDash (NASDAQ:DASH) marketing and the potential launch of new menu items, such as stuffed crust pizza. The firm believes that these initiatives, along with other underutilized marketing and operational levers, could support a sustained 3% SSS growth into the long term.
Evercore ISI suggests that while the near-term focus is on the drivers of SSS growth for the second half of 2025, the expansion of the company’s multiple and long-term value creation will hinge on the effectiveness of SSS drivers in the second half of 2026 and beyond. Analysts are on the lookout for impactful food platform menu news, like new chicken offerings, which could play a significant role in maintaining growth momentum.
In terms of financial projections, Evercore ISI has largely kept its 2025 estimates unchanged but has slightly reduced its 2026 earnings per share (EPS) forecast to $19.44, down from the consensus estimate of $19.40. With current diluted EPS at $16.69 and a P/E ratio of 27.5x, the stock trades at a premium valuation relative to near-term earnings growth. This adjustment reflects an anticipated decrease in international net unit growth. The firm’s $480 price target is based on 24 times the projected 2026 earnings. Despite the minor adjustment for 2026, the firm’s long-term outlook for Domino’s Pizza remains optimistic. For deeper insights into DPZ’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes detailed analysis of the company’s financial health, growth potential, and market position.
In other recent news, Domino’s Pizza reported its fourth-quarter earnings for 2024, which fell short of analysts’ expectations. The company posted an earnings per share (EPS) of $4.89, missing the forecasted $4.96, and revenue of $1.44 billion, below the anticipated $1.49 billion. Despite these challenges, Domino’s saw a 4.4% growth in global retail sales and an 8% increase in operating income, indicating some operational efficiencies. Additionally, Domino’s extended its exclusive partnership with Uber (NYSE:UBER) Eats, contributing approximately 2.7% to its total revenue in the fourth quarter of 2024.
Analysts from Morgan Stanley (NYSE:MS) and TD Cowen maintained positive outlooks on Domino’s stock, with Morgan Stanley reiterating an Overweight rating and a $496 price target, while TD Cowen reaffirmed a Buy rating with a $490 price target. Both firms highlighted Domino’s strategic focus on expanding third-party delivery platforms and product innovation. Domino’s management plans to negotiate with other third-party food aggregators and expects this channel to potentially contribute up to $1 billion in sales. Despite these developments, Domino’s has yet to partner with DoorDash, the leading food delivery service in the U.S., though analysts see a partnership as likely in the second half of 2025.
Looking ahead, Domino’s anticipates a 3% growth in U.S. same-store sales for 2025 and plans to open over 175 new stores in the U.S. The company is also investing in product innovation, planning to launch at least two new products annually. Domino’s continues to focus on enhancing its value perception among consumers, aligning with its long-standing emphasis on value-driven strategies.
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