Domino's Pizza stock target raised to $565 on strong sales momentum



On Monday, financial services firm Stifel raised its price target on Domino's Pizza (NYSE: ) stock to $565 from the previous price of $550, while maintaining a buy rating on the stock. The revision comes after Domino's reported first-quarter earnings that beat analysts' expectations.

The pizza chain's first-quarter profit beat expectations by a wide margin, with earnings per share (EPS) of $3.58, beating Stifel's forecast of $3.50 and the consensus estimate of $3.40. This performance is particularly noteworthy because it was achieved without taking into account any potential negative impact on the company's mark-to-market valuation of its investment in DPC, which could represent an EPS headwind of approximately $0.42 compared to Stifel's estimates .

Domino's showed strong sales momentum in the first quarter, which Stifel believes validates their investment thesis. The company leverages its industry leadership by offering value promotions through its approximately 33 million-member Domino's Rewards program, launching new products designed to deliver value and growing orders through its Uber (NYSE:) Eats platform.

The company expects Domino's to continue performing well in the second quarter, drawing attention to the brand's growing appeal across consumer income groups. The expansion is particularly notable given the weakness in the broader quick-service restaurant (QSR) sector.

Stifel remains optimistic about Domino's future, noting that the company has a solid strategy in place to achieve sustainable sales growth for many years. That confidence is reflected in the firm's ongoing Buy rating on the pizza company's stock.

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Investment Professional Insights

Following Stifel's upbeat assessment, new data from InvestingPro provides a financial view of Domino's Pizza's current market position. Domino's has a market capitalization of $18.21 billion and a price-to-earnings ratio of 35.83, which is a very high price-to-earnings ratio. The PEG ratio of 1.97 further emphasizes this point, suggesting that investors may expect higher future earnings growth relative to the current P/E ratio. Notably, the company's strong performance has been reflected in its high returns over the last year, with a one-year total return of 59.33%, showing a positive trend in investor confidence.

InvestingPro Tips emphasizes that Domino's has not only raised its dividend for 10 consecutive years, but also maintained its dividend for 13 consecutive years, demonstrating its commitment to providing value to shareholders. Additionally, the company's current assets exceed its short-term liabilities, indicating financial stability and the ability to meet immediate liabilities. For readers interested in learning more about Domino's financial health and future prospects, you can use a coupon code to access more InvestingPro Tips PRONEWS24 Enjoy an additional 10% discount on yearly or annual Pro and Pro+ subscriptions.

As Domino's continues to innovate and grow, these financial metrics and insights from InvestingPro provide a valuable layer of analysis for investors considering the company's stock in their portfolios.

This article was generated with the support of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.





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