Domino's Pizza shares maintains Buy rating with TD Cowen amid sales outlook

On Friday, TD Cowen reaffirmed its confidence in Domino's Pizza (NYSE:DPZ), maintaining a Buy rating and a price target of $475.00. The firm's analysis acknowledges a reduction in the expected global retail sales for 2025, primarily due to international markets, which are valued less than U.S. operations.

The firm remains optimistic about Domino's future performance, particularly in the U.S. market. The anticipated launch with DoorDash (NASDAQ:DASH), the second-year impact of the partnership with Uber (NYSE:UBER), and new menu innovations are key factors that TD Cowen believes will support Domino's in outperforming consensus expectations for U.S. comparable sales by 2025.

TD Cowen stands by its projection of a 4.5% increase in U.S. same-store sales (SSS) for Domino's by 2025. The firm's steadfast price target reflects its belief in the company's strong strategic approach and its potential to thrive in the quick-service restaurant sector.

The analyst from TD Cowen highlighted international operations as the reason behind the revised global sales forecast. However, the U.S. segment's growth prospects appear to remain unaffected by this adjustment.

Domino's Pizza continues to focus on strategic partnerships and menu innovation to drive growth. These initiatives, along with a robust business model, are expected to play a significant role in the company's ability to meet and potentially exceed market expectations in the coming years.

In other recent news, Domino's Pizza's third-quarter earnings per share reached $4.19, surpassing the estimated $3.65. However, the company reported a 3% increase in U.S. same-store sales, falling short of the projected 3.6% increase, and a 0.8% increase in international sales, missing the anticipated 2.9% growth.

BTIG reduced the stock's price target to $500 from the previous $580, while still recommending a Buy rating. Evercore ISI maintained its Outperform rating with a steady price target of $480, highlighting the company's performance in the fourth quarter. Citi revised its price target for shares of Domino's Pizza to $440 from the previous $450 while maintaining a Neutral rating.

Goldman Sachs maintained a Buy rating on Domino's shares with a price target of $515, despite the pizza giant's performance lagging slightly behind expectations. Wells Fargo adjusted its financial outlook for Domino's Pizza, reducing the price target to $420 from the previous $450, while maintaining an Equal Weight rating.

These are recent developments in the company's performance.

InvestingPro Insights

Complementing TD Cowen's optimistic outlook on Domino's Pizza (NYSE:DPZ), recent data from InvestingPro provides additional context to the company's financial health and market position. Despite the revised global sales forecast, Domino's shows resilience in key financial metrics. The company's revenue growth of 2.28% over the last twelve months and a more impressive 7.14% growth in the most recent quarter align with TD Cowen's positive stance on U.S. market performance.

InvestingPro Tips highlight Domino's strong dividend history, having raised its dividend for 11 consecutive years and maintained payments for 13 years. This consistent dividend growth, coupled with a current yield of 1.48%, underscores the company's commitment to shareholder returns, which may appeal to income-focused investors.

Moreover, Domino's profitability remains robust, with a gross profit margin of 28.44% and an operating income margin of 18.5% in the last twelve months. These figures support TD Cowen's confidence in the company's strategic approach and potential for outperformance.

For investors seeking a deeper dive into Domino's financial health, InvestingPro offers 8 additional tips, providing a comprehensive analysis to inform investment decisions.

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