On Friday, Loop Capital held steady on its outlook for Domino's Pizza (NYSE:DPZ) shares with a continued Hold rating and a price target of $419.00. The firm's recent checks with U.S. franchisees revealed that Domino's same-store sales growth slowed during the third quarter of 2024, yet results aligned with market expectations.
According to Loop Capital, Domino's experienced a decrease in same-store sales growth from approximately 4.5% in the first nine weeks of the fiscal third quarter to a range of 3.0-3.5% in the final three weeks. Overall, the quarter saw an estimated 4.0% increase in same-store sales, which was consistent with Loop Capital's projection and slightly above the consensus prediction of a 3.9% rise.
The firm's analysis indicated that on a two-year stacked basis, the 4.0% growth signifies a 3.3% gain, which is a slight drop from the 4.7% two-year stack reported in the second quarter of 2024. However, the implied three-year stack of 5.5% for the third quarter marks a notable acceleration from 2.2% in the previous quarter.
Loop Capital's decision to maintain the Hold rating and price target for Domino's Pizza is based on a multiple of 24 times their 2025 earnings per share estimate. The firm's commentary suggests that while there has been a deceleration in growth towards the end of the quarter, the overall performance remains solid and in line with their expectations.
In other recent news, Domino's Pizza has experienced a series of analyst adjustments, primarily driven by revised earnings and revenue estimates. Stifel maintains a Buy rating, setting a stock price target at $480 and adjusting the full-year earnings per share (EPS) estimate to $16.13, slightly below the consensus of $16.17. The firm anticipates Domino's will outperform competitors in the quick-service restaurant (QSR) pizza sector and capture additional market share, despite increased headwinds in the industry.
TD Cowen, while maintaining a Buy rating, has lowered its price target for Domino's to $475 due to an anticipated slowdown in U.S. same-store sales. However, the firm remains optimistic about the company's performance in 2025, expecting benefits from a potential partnership with DoorDash (NASDAQ:DASH).
Baird reduced its price target for Domino's to $535 but maintained an Outperform rating. Despite cautious remarks regarding the macroeconomic environment, Baird expressed confidence in Domino's ability to meet its 2024 EBIT growth target of over 8%.
BMO Capital, despite acknowledging increased consumer pressures, reduced the stock's price target to $510 but remained optimistic about the company's multi-year growth prospects. Lastly, Oppenheimer reduced its price target to $490 but maintained an Outperform rating, highlighting Domino's competitive advantages and potential for above-peer unit growth.
InvestingPro Insights
As Domino's Pizza (NYSE:DPZ) maintains a steady performance, insights from InvestingPro provide a deeper understanding of the company's financial health and market standing. With a market capitalization of $14.4 billion and a P/E ratio of 24.96, Domino's is positioned as a significant player in the industry. The company's commitment to shareholder returns is evident, with a track record of raising its dividend for 10 consecutive years and maintaining dividend payments for 13 consecutive years, as highlighted by InvestingPro Tips.
Even though the price has seen a drop over the last three months, Domino's has demonstrated resilience, remaining profitable over the last twelve months. This is further corroborated by analysts' predictions that the company will stay profitable this year. Moreover, the company's liquid assets surpass its short-term obligations, indicating a stable financial footing.
With a dividend yield of 1.48% and a notable dividend growth of 24.79% in the last twelve months, investors may find Domino's an attractive option for consistent returns. For those looking to dive deeper, InvestingPro offers additional tips and a fair value estimate of $397.39, reflecting a comprehensive analysis of Domino's Pizza's financial metrics and market potential.
Investors interested in exploring further can find a total of 9 InvestingPro Tips for Domino's Pizza, which could provide valuable insights for making informed investment decisions. Visit https://www.investing.com/pro/DPZ for an in-depth look at these tips and more detailed metrics.
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