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On Thursday, RBC Capital Markets reaffirmed their positive stance on Domino’s Pizza (NYSE:DPZ) shares (NASDAQ:DPZ), maintaining an Outperform rating and a $500.00 price target. Currently trading at $473.14, the stock has shown strong momentum with a 15.5% return over the past year. According to InvestingPro data, analyst targets for the stock range from $402 to $559, with a consensus recommendation leaning towards "Buy." The firm’s analysts highlighted the pizza chain’s capacity to continue gaining market share despite a general softening in the category. Domino’s Pizza is scheduled to release its fourth-quarter earnings before the market opens on February 24.
The analysts are keenly awaiting the earnings report to assess U.S. demand trends and Domino’s market share, especially in light of competitors indicating a quarter-over-quarter softening in the category. They are also looking for any announcements regarding a potential partnership with DASH and its possible contributions to Domino’s business model. The company maintains strong financial health with a current ratio of 1.71, indicating solid liquidity. Notable for income investors, Domino’s has raised its dividend for 11 consecutive years, currently yielding 1.27%. Additionally, insights into improvements in the international segment of the business are anticipated.
RBC Capital’s analysts have slightly lowered their estimates but remain optimistic about Domino’s prospects. This sentiment is bolstered by the possibility of a partnership announcement with DASH and a more positive outlook on the international business. The analysts’ commentary suggests that these factors could provide further momentum for the stock, which has already shown strong performance recently.
Investors are now looking forward to the release of Domino’s fourth-quarter earnings report on Monday, which will provide further clarity on the company’s performance and strategic direction. The potential partnership with DASH and updates on the international business will be key points of interest that could influence the company’s stock trajectory moving forward. Trading at relatively high EBITDA and revenue multiples, InvestingPro analysis suggests the stock is slightly overvalued at current levels. For deeper insights into Domino’s valuation and growth prospects, investors can access comprehensive Pro Research Reports, available exclusively to InvestingPro subscribers.
In other recent news, Domino’s Pizza reported a slight deceleration in same-store sales growth towards the end of the fourth quarter, with full-quarter comps rising by 2.0-2.5%, according to Loop Capital. Despite this, the firm maintained its Buy rating on Domino’s, setting a price target of $559, reflecting confidence in the company’s growth trajectory. Meanwhile, TD Cowen adjusted its price target for Domino’s to $490, citing a slight modification in fourth-quarter U.S. same-store sales expectations. Morgan Stanley (NYSE:MS) also revised its outlook, reducing the price target to $496 while maintaining an Overweight rating, noting slower recent trends but emphasizing potential growth drivers like expanded delivery services.
Guggenheim Securities lowered its price target from $460 to $450 and kept a Neutral rating, adjusting earnings per share projections for 2025 and 2026. The analysts highlighted the anticipated launch on DoorDash (NASDAQ:DASH) as a potential sales boost but expressed concerns about international unit growth. A Midwest investment research boutique shared a positive outlook for 2025, focusing on strategic initiatives like Stuffed Crust offerings and third-party partnerships. Domino’s efforts to innovate and expand its market presence appear to be key factors in its projected performance, with analysts offering varied perspectives on its future trajectory.
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