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Investing.com - UBS initiated coverage on DPC Dash Ltd (HK:1405), the master franchisee of Domino’s Pizza (NYSE:DPZ) in China, with a Buy rating and a price target of HK$135.00.
UBS analyst Viola Yang highlighted that while Domino’s is the largest pizza brand globally by store count, China remains an under-penetrated market for the company.
The investment bank expects DPC’s store expansion to accelerate over the next three years, projecting more than 2,000 directly operated restaurants by 2027, up from 1,105 as of March, which should enhance profitability through operating leverage.
UBS forecasts a 30% adjusted EBITDA CAGR for DPC Dash over 2025-27, noting that the stock currently trades at 16x 2026E EV/adjusted EBITDA (pre-IFRS16), compared to a global restaurant average of 17x with a 10% EBITDA CAGR.
The firm believes the market has fully priced in near-term same-store sales growth pressure but has overlooked DPC’s potential store expansion and improved profitability, with media coverage from entering new cities identified as a potential catalyst.
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