UBS reiterates Buy rating on Domino’s Pizza stock ahead of Q2 results

Investing.com - UBS maintained its Buy rating and $540.00 price target on Domino’s Pizza (NASDAQ:DPZ) ahead of the company’s second-quarter earnings report scheduled for July 21. The stock currently trades at $472.64, with analyst targets ranging from $340 to $594. According to InvestingPro data, the company maintains strong financial health with a "GOOD" overall score.

UBS believes Domino’s is positioned for strengthening U.S. same-store sales momentum through 2025, supported by key sales initiatives and accelerating global new store growth in coming years. The firm notes that investor expectations for U.S. same-store sales are generally around 1.5-2%, compared to consensus estimates of 2.0%. The company has demonstrated solid performance with revenue growth of 4.28% over the last twelve months and maintains a healthy gross profit margin of 28.44%.

Investors are primarily focused on U.S. sales trends in the second half of 2025, looking at contributions from DoorDash (NASDAQ:DASH) and third-party delivery partnerships, stuffed crust offerings, promotions, and potential menu innovations. UBS expects Domino’s to largely reiterate its 2025 guidance, including approximately 6% global retail sales growth excluding foreign exchange effects. InvestingPro analysis reveals the company has maintained dividend payments for 14 consecutive years, with a current dividend yield of 1.5%.

The firm sees potential upside for Domino’s shares driven by a "compelling catalyst path" that should strengthen U.S. sales momentum, with opportunities for multiple expansion as the company outperforms quick-service restaurant peers. UBS believes the stock could benefit as Domino’s demonstrates industry outperformance within what it describes as a "more sluggish pizza category." For deeper insights into DPZ’s valuation and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro, which covers over 1,400 top US stocks.

Investor debate is likely to continue regarding growth prospects after the company laps its 2025 U.S. sales drivers and what future sales initiatives exist to maintain momentum.

In other recent news, Domino’s Pizza has been the focus of several analyst assessments and strategic evaluations. Loop Capital maintained its Buy rating with a price target of $564, noting that Domino’s same-store sales growth exceeded expectations in the fiscal second quarter, although early third-quarter performance appears softer than anticipated. Meanwhile, Morgan Stanley (NYSE:MS) raised its price target to $514, citing a solid outlook bolstered by the success of the stuffed crust pizza and the DoorDash partnership, despite some concerns about international growth. BMO Capital reiterated an Outperform rating with a $540 target, highlighting Domino’s market share gains and confidence in sustaining sales momentum into 2026. However, Redburn-Atlantic initiated coverage with a Sell rating and a $340 target, pointing to challenges such as weak organic traffic and potential impacts from the adoption of GLP-1. Melius Research also initiated coverage with a Hold rating, suggesting that much of Domino’s strengths are already reflected in its current stock price. These developments indicate a mixed outlook for Domino’s, with varying expectations about its future performance.

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