RBC maintains Domino’s Pizza stock Outperform amid soft guidance

On Tuesday, RBC Capital Markets maintained a positive stance on Domino’s Pizza (NASDAQ:DPZ) shares, despite acknowledging the company’s fourth-quarter results fell short of expectations. With a current market capitalization of $15.58 billion and trading at a P/E ratio of 27.54x, InvestingPro analysis suggests the stock is currently trading near its Fair Value. Analysts at RBC reiterated an Outperform rating with a stable $500.00 price target on the stock.

In a recent report, RBC analysts pointed out that Domino’s Pizza’s fourth-quarter performance did not meet anticipated levels. The company’s 2025 guidance was described as relatively soft, influenced by challenges such as slower international unit growth and pressures on U.S. consumer demand. This cautious outlook is reflected in InvestingPro data, showing 12 analysts revising their earnings estimates downward for the upcoming period. Management anticipates that top and bottom line growth in 2026 will mirror that of 2025, following the company’s current revenue growth of 5.07%.

However, RBC emphasized that Domino’s Pizza’s U.S. guidance remains unchanged, with expectations of over 3% growth in same-store sales (SSS) and the addition of more than 175 net new units. This projection includes the potential benefits from additional aggregator partnerships, following the end of Uber (NYSE:UBER)’s exclusive agreement on May 1, 2023.

Despite the need to lower estimates based on the recent report and guidance, RBC’s analysts believe that the challenges facing Domino’s international and U.S. consumer demand are already well understood by the market. The firm’s maintained Outperform rating suggests confidence in the company’s ability to navigate these challenges successfully. Notably, InvestingPro data reveals the company has maintained dividend payments for 14 consecutive years, with an impressive dividend growth of 24.79% in the last twelve months, demonstrating financial resilience. For deeper insights into DPZ’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Domino’s Pizza’s stock performance will continue to be watched closely by investors as the company adapts to market conditions and expands its partnerships in the competitive food delivery landscape. The company maintains a strong financial health score according to InvestingPro metrics, suggesting potential for continued stability despite near-term challenges.

In other recent news, Domino’s Pizza reported its fourth-quarter earnings, revealing an earnings per share (EPS) of $4.89, which matched consensus expectations but fell short of Loop Capital’s forecast of $5.13. BMO Capital Markets responded by raising its price target for Domino’s to $515, maintaining an Outperform rating, citing confidence in the company’s strategic direction and potential for reaccelerated comparable store sales growth. Meanwhile, Loop Capital adjusted its price target to $555 from $559, maintaining a Buy rating despite the mixed results, noting a stronger-than-expected international same-store sales increase of 2.7%. Evercore ISI also maintained an Outperform rating with a $480 price target, anticipating strong same-store sales growth driven by new marketing strategies and product offerings in the latter half of 2025. Morgan Stanley (NYSE:MS) reiterated an Overweight rating with a $496 target, highlighting Domino’s plans to add more aggregator platforms and extend its Uber exclusivity agreement. Cowen reaffirmed a Buy rating with a $490 target, noting the company’s guidance for under 3% U.S. comparable sales in the first half of 2025 and the potential sales lift from integrating DoorDash (NASDAQ:DASH) services. These developments reflect varied analyst perspectives on Domino’s strategic initiatives and financial projections for the upcoming years.

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