Morgan Stanley raises Domino’s Pizza stock price target to $520 on solid growth

Investing.com - Morgan Stanley (NYSE:MS) raised its price target on Domino’s Pizza (NASDAQ:DPZ) to $520.00 from $514.00 on Monday, while maintaining an Overweight rating on the stock. The pizza chain, currently trading at $465.95 with a market capitalization of $15.95 billion, appears overvalued according to InvestingPro’s Fair Value analysis.

The investment bank attributed its decision to Domino’s solid performance and execution on key initiatives, despite what it described as a muted stock reaction to the company’s recent quarterly results. The company has demonstrated consistent financial strength, with revenue growing 4.28% over the last twelve months and maintaining dividend payments for 14 consecutive years.

Morgan Stanley noted that Domino’s operates in a challenging pizza segment but highlighted the company’s ability to continue gaining market share in the broader quick-service restaurant industry while maintaining a strong value proposition.

The firm indicated that Domino’s near-term financial targets appear achievable or potentially beatable over the next year, prompting the modest increase in the price target.

Morgan Stanley acknowledged ongoing investor debates about Domino’s long-term growth rate beyond 2026, describing this as a key topic during recent earnings calls and investor conversations.

In other recent news, Domino’s Pizza reported its second-quarter 2025 earnings, revealing a slight miss on earnings per share (EPS) at $3.81, which was below the market forecast of $3.94. However, revenue met expectations at $1.15 billion, indicating stable top-line performance. The company demonstrated solid performance with a 5.6% growth in global retail sales, supported by a 3.4% rise in U.S. same-store sales and the addition of 30 net new stores. Domino’s also completed a national rollout with DoorDash (NASDAQ:DASH), which is expected to be a significant driver for U.S. sales in the latter half of the year.

BTIG reiterated its Buy rating for Domino’s, maintaining a price target of $530.00, citing strong sales growth driven by the new Stuffed Crust offering. The firm also noted a change in management’s tone regarding the potential addition of fryers in restaurants, which could enhance competition in the chicken and wing category. Despite the earnings miss, Domino’s repurchased 316,000 shares for $150 million, signaling confidence in its financial health.

The company projects U.S. same-store sales to grow by 3% for the year, with international growth anticipated at 1-2%. Additionally, Domino’s plans to open over 175 net new stores globally. CEO Russell Wiener expressed confidence in the company’s strategic position, highlighting the adaptability and strong market share growth potential. Analysts from BTIG expressed confusion over the stock’s negative reaction to the earnings report, attributing it to short-term focus rather than the company’s strong fundamentals.

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