Oppenheimer expects Domino's “share price to continue to rise,” lifts PT by $50

Oppenheimer revised its outlook for Domino's Pizza (NYSE: ) on Tuesday, raising the price target to $580 from the previous price of $530 while maintaining an outperform rating. The adjustment comes after Domino's reported first-quarter results that beat expectations, notably same-store sales (SSS), which rose 5.6% versus Wall Street expectations of 4.2%.

The company's performance was attributed to significant share gains, driven primarily by increased customer traffic. Oppenheimer's analysis suggests these gains are likely to persist, driven by Domino's ongoing initiatives such as loyalty programs and partnerships with third-party delivery services. The company also praised Domino's for its value pricing strategy, which has been well received by consumers.

Despite the strong sales momentum, Domino's management chose to maintain a conservative outlook for fiscal 2024, reiterating its expectation of “flat” EBIT margins. Oppenheimer believes this stance is prudent given current market conditions.

Oppenheimer slightly adjusted its 2024 earnings per share (EPS) forecast and raised its 2025 EPS forecast to above consensus after discussions with Domino's management and a reassessment of the company's financial health. The company's renewed confidence in Domino's growth trajectory and financial health is reflected in a revised price target, signaling a bullish view on the pizza chain's stock.

Investment Professional Insights

With Domino's Pizza (NYSE: DPZ ) receiving a positive outlook from Oppenheimer, InvestingPro's immediate data is in line with sentiment for growth and strong results. Domino's has a market capitalization of US$18.36 billion, demonstrating a solid financial position. As of the first quarter of 2024, the company's revenue in the past 12 months was US$4.54 billion, a slight quarterly increase of 5.88%, showing an upward trend in sales. Gross profit margin during the same period remained at a healthy level of 28.48%, supporting the company's ability to maintain profitability amid market challenges.

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InvestingPro Tips highlights that Domino's has raised its dividend for 10 consecutive years, with a significant dividend increase of 24.79% in the past 12 months to the first quarter of 2024. . Additionally, the stock posted significant returns last week, with a total price return of 9.55%, indicating investor confidence in the recent earnings report. However, with an adjusted P/E ratio of 34.92 and the stock trading near its 52-week high, investors are paying a premium for this performance. For those interested in exploring more insights, 16 additional InvestingPro tips for Domino's Pizza can be found at https://www.investing.com/pro/DPZ.Don’t forget to use the coupon code PRONEWS24 Annual or biennial Pro and Pro+ subscriptions receive an additional 10% discount.

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