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Investing.com -- Domino’s Pizza Group (LON:DOM) has been downgraded to “hold” from “buy,” with a revised target price of 235p from 309p, according to Deutsche Bank analyst Richard Stuber. The stock closed Monday at 203.80p.
Stuber said the company’s investment case has shifted significantly over the past two years.
Where Domino’s previously emphasized returning most of its free cash flow to shareholders through buybacks, management has redirected its focus toward reinvestment, including the possibility of a brand acquisition aimed at accelerating earnings growth.
That strategy has introduced costs and heightened uncertainty, particularly around timing and execution, Stuber said.
The lack of clarity has weighed on the stock and raised the appeal of share buybacks as an alternative.
Domino’s recently announced a small buyback program alongside the launch of a chicken sub-brand.
Stuber described those moves as a compromise between reinvestment ambitions and shareholder return policies.