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Investing.com - UBS has reiterated its Buy rating and $540.00 price target on Domino’s Pizza (NASDAQ:DPZ), currently valued at $16.2 billion, following the company’s second-quarter results, which showed better-than-expected same-store sales in both U.S. and international markets despite ongoing macroeconomic pressures. According to InvestingPro data, 13 analysts have recently revised their earnings estimates upward for the upcoming period.
The pizza chain maintained its 2025 guidance, projecting approximately 8% operating income growth driven by global retail sales growth in line with 2024 (about 6% excluding foreign exchange effects). This outlook appears achievable given the company’s current revenue growth of 3.65% and strong financial health score from InvestingPro. This includes expectations of 3% U.S. same-store sales growth and 1-2% international same-store sales growth, assuming economic conditions don’t worsen.
UBS believes Domino’s 2025 U.S. same-store sales target of 3% appears achievable or potentially beatable, supported by several growth initiatives including Parmesan Stuffed Crust, the DoorDash (NASDAQ:DASH) partnership, value promotions, loyalty programs, and carryout momentum. The company has demonstrated consistent shareholder returns with 11 consecutive years of dividend increases, currently yielding 1.51%.
International same-store sales grew 2.4% in the second quarter, exceeding expectations and driven by solid growth in key markets. UBS suggests there’s potential upside to the company’s 2025 international sales guidance if macroeconomic and geopolitical pressures don’t intensify in the second half of the year.
UBS expressed surprise that Domino’s shares didn’t react more favorably to the strong sales trends, but believes that continued sales momentum in the second half of 2025 and improved visibility into catalysts supporting sales trends and market share gains in 2026 should drive stock appreciation.
In other recent news, Domino’s Pizza reported its second-quarter 2025 operating results, with revenues slightly exceeding consensus expectations by $2 million. The company’s earnings per share were $3.81, which fell short of both Loop Capital’s estimate of $3.91 and the consensus forecast of $3.95. Despite this, U.S. comparable sales grew by 3.4%, driven by increased traffic, a 1.4% rise in pricing, and higher check values, particularly from the Stuffed Crust offering. Delivery sales improved by 400 basis points quarter-over-quarter to 1.5%, while carryout sales grew 5.8% year-over-year.
In response to these results, several analyst firms have adjusted their price targets for Domino’s Pizza. Benchmark raised its price target to $540, maintaining a Buy rating, while Loop Capital increased its target to $574, also with a Buy rating. Wells Fargo (NYSE:WFC) and Bernstein both raised their price targets to $490, with Wells Fargo maintaining an Equal Weight rating and Bernstein a Market Perform rating. Additionally, Citi maintained its Neutral rating and $500 price target, noting anticipated top-line growth as third-party delivery integration progresses. These recent developments reflect a mixed but generally positive outlook for the company’s future performance.
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