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On Tuesday, Evercore ISI, a respected research firm, increased its price target for Domino’s Pizza (NYSE:DPZ) shares to $520 from the previous $480 while maintaining an Outperform rating on the stock. This adjustment reflects the firm’s anticipation of a growth spurt in the company’s same-store sales (SSS) within the United States, expected to rise to mid-single digits (MSD) or possibly higher in the second half of 2025, with continuous market share gains projected through 2026. According to InvestingPro data, the company, currently valued at $16.8 billion, is trading above its Fair Value, with 8 analysts recently revising their earnings expectations upward.
Despite acknowledging the challenges posed by trends among lower-income consumers, Evercore ISI believes that Domino’s recent initiatives, such as the introduction of Stuffed Crust Pizza and marketing collaborations with DoorDash (NASDAQ:DASH), will help sustain sales momentum. These strategies are seen as interim solutions while the pizza chain prepares to roll out further innovations in its menu, marketing efforts, and technology. The company’s revenue growth of 5.07% in the last twelve months supports this optimistic outlook.
In line with these expectations, Evercore ISI has also revised its earnings per share (EPS) estimate for Domino’s in 2026 upward by 2%, setting it at $19.93, which signifies a 10% year-over-year increase. This is slightly above the consensus estimate of $19.40. The new price target of $520 is justified by a price-to-earnings (P/E) ratio of 26 times, which is at the higher end of the spectrum for global franchised peers, a premium attributed to Domino’s anticipated near-term growth. InvestingPro shows the current P/E ratio at 27.95x, with analysts forecasting EPS of $17.40 for FY2025. For deeper insights into Domino’s valuation metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The research firm’s commentary underscores the potential of Domino’s Pizza to outperform in the near term, fueled by a combination of product innovation and strategic marketing efforts. The collaborative promotion with DoorDash, a popular food delivery platform, alongside menu expansions like the Stuffed Crust Pizza, are expected to act as catalysts for sales growth.
Evercore ISI’s confidence in Domino’s is also reflected in the raised EPS forecast for 2026, suggesting that the company’s growth trajectory is not only strong but also sustainable over the next few years. The firm’s analysis indicates that despite current economic headwinds affecting some consumer segments, Domino’s is well-positioned to navigate these challenges and continue its upward climb.
In other recent news, Domino’s Pizza reported its Q1 2025 earnings, exceeding earnings per share (EPS) expectations with an actual EPS of $4.33 against a forecasted $4.00, although the company’s revenue fell short at $1.11 billion compared to the expected $1.13 billion. Despite a 0.5% decline in U.S. same-store sales, global retail sales grew by 4.7%. Analysts from Stifel have shown confidence in Domino’s by raising the stock price target to $510, maintaining a Buy rating, while Wells Fargo (NYSE:WFC) increased the target to $465, keeping an Equal Weight rating. Stifel highlighted the resilience of Domino’s, attributing it to successful product launches like the Parmesan Stuffed Crust and strategic initiatives such as partnerships with delivery platforms like DoorDash. Domino’s plans to roll out DPC Dash in May, which is anticipated to significantly boost sales. The company has reiterated its guidance for 2025, projecting a 3% growth in U.S. same-store sales, with expectations of stronger performance in the latter half of the year. Domino’s also aims for an 8% increase in operating profit and 1-2% international same-store sales growth amidst geopolitical challenges.
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