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On Monday, Stifel analysts showed confidence in Domino’s Pizza (NASDAQ:DPZ) by increasing the company’s price target from $500 to $510, while maintaining a Buy rating on the stock. With a current market capitalization of $16.9 billion and trading at $492.28, InvestingPro analysis suggests the stock is trading above its Fair Value, though 8 analysts have recently revised their earnings expectations upward for the upcoming period. The decision follows Domino’s Pizza’s first quarter performance, which revealed a slight decline in comparable store sales of 0.5%. This figure fell below Stifel’s own estimate of 0.9% but was slightly better than the general expectation of 0.3%. The company maintains strong fundamentals, with a 5.07% revenue growth over the last twelve months and an impressive return on assets of 34.24%. InvestingPro data reveals over 10 additional key insights about DPZ’s financial health, available to subscribers.
The company’s quarterly results mirrored the inconsistent patterns seen throughout the restaurant sector during this period. Despite the minor setback, Domino’s Pizza has decided to uphold its full-year forecast, which had already taken into account a challenging economic landscape. The company also noted that if conditions deteriorate, it might affect their ability to achieve the projected 3% growth in domestic same-store sales—a sentiment that echoes their previous quarter’s statement. Notably, the company has maintained dividend payments for 14 consecutive years, with a current dividend yield of 1.43%.
Stifel’s analysts pointed out that Domino’s Pizza has shown resilience, particularly with the successful introduction of its Parmesan Stuffed Crust and a robust lineup of value promotions. These strategies have garnered a positive customer response and have contributed to the company’s improving two-year stacked performance in both delivery and carryout sales.
The analysts believe that Domino’s Pizza stands as one of the better-positioned companies within the restaurant industry to excel in a consumer market focused on value. They expect that the chain will continue to grow sales and increase its market share through specific company initiatives. Among these initiatives is the anticipated partnership with DoorDash (NASDAQ:DASH), along with ongoing value deals and the introduction of new menu items. These steps are seen as pivotal in driving Domino’s forward in a highly competitive and fragmented market sector.
In other recent news, Domino’s Pizza Inc. reported its Q1 2025 earnings, revealing a mixed financial performance. The company exceeded earnings per share (EPS) expectations with a reported EPS of $4.33, surpassing the forecasted $4.00. However, Domino’s revenue fell short of projections, reaching $1.11 billion compared to the anticipated $1.13 billion. Despite this revenue miss, the company saw a 4.7% increase in global retail sales, driven by net store growth, although U.S. same-store sales declined by 0.5%. Domino’s has projected a 3% growth in U.S. same-store sales for 2025, with strategic initiatives expected to drive back-half weighted growth. The company also anticipates an 8% rise in operating profit and 1-2% international same-store sales growth. Analysts have noted the company’s strategic pricing adjustments and the upcoming national launch of a partnership with DoorDash, which is expected to enhance sales through third-party delivery platforms. Additionally, Domino’s has initiated organizational changes to streamline operations, aiming to support its long-term strategic goals.
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