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Investing.com - Morgan Stanley (NYSE:MS) raised its price target on Domino’s Pizza (NASDAQ:DPZ) to $514.00 from $510.00 on Thursday, while maintaining an Overweight rating on the stock. Currently trading at $463.48, the stock carries a P/E ratio of 26.27x and commands a market capitalization of $15.87 billion. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.
The investment bank cited several factors supporting its positive outlook, including expectations that same-store sales have "picked up reasonably well" and should accelerate in the second half of the year based on comparisons. The company has demonstrated steady growth, with revenue increasing 4.28% over the last twelve months.
Morgan Stanley noted that Domino’s partnership with DoorDash (NASDAQ:DASH) continues to ramp up, with marketing initiatives still ahead, and that the company’s stuffed crust pizza introduction "seems to have been successful."
The firm acknowledged investor concerns about soft underlying delivery growth, questions about whether comparable sales should be higher given key initiatives, and uncertainties in the international business, particularly related to DMP.
While Morgan Stanley trimmed its international unit growth forecast, it indicated this had minimal impact on earnings estimates due to foreign exchange offsets, and the firm believes its net store growth estimates remain achievable despite being below 2023 targets.
In other recent news, Domino’s Pizza has shown varied performance in its recent fiscal quarters. Loop Capital reported that Domino’s same-store sales growth in the fiscal second quarter exceeded expectations, with a 2.5% increase, surpassing the consensus forecast of 1.9%. However, early third-quarter results indicate softer performance, with sales tracking below estimates. Meanwhile, BMO Capital reiterated its Outperform rating on Domino’s, citing ongoing market share gains and confidence in the company’s ability to maintain momentum beyond 2025.
Redburn-Atlantic initiated coverage on Domino’s with a Sell rating and a $340 price target, pointing to challenges such as weak organic traffic and reliance on lower-income consumers. UBS maintained its Buy rating, expressing confidence in the potential for increased sales momentum and market share growth, supported by strategic initiatives. JPMorgan raised its price target for Domino’s to $460 despite first-quarter results not meeting expectations, attributing positive trends to the new stuffed crust pizza and the anticipated addition to the DoorDash platform. The international segment outperformed expectations, with a 3.7% increase in first-quarter comparable sales, surpassing forecasts.
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