On Wednesday, Domino's Pizza (NYSE:DPZ) Enterprises Ltd. (DMP:AU) (OTC: DPZUF) shares saw its price target adjusted by an investment firm, reflecting a slight shift in market expectations. The firm set a new target of AUD46.00, down from the previous target of AUD48.00. Despite this reduction, the firm reaffirmed its Buy rating on the company's shares.
The adjustment comes after an evaluation of the company's recent strategic decisions. Domino's Pizza Enterprises had expanded its store count significantly, but some of the new locations were based on an economic model boosted by the unique demand patterns during the COVID-19 pandemic. As a result, the company is now looking to close some underperforming stores, particularly in France and Japan.
The investment firm believes that this consolidation is a positive move for the company's same-store sales growth (SSSg) and overall unit economics. The strategic closures are expected to pave the way for a stronger foundation for growth, anticipated to commence in the fiscal year 2026.
Further confidence in the company's future performance is drawn from increased oversight by the Domino's Board and advice from external experts. These measures are seen as steps that will support the company's trajectory towards growth.
The firm's outlook remains positive, citing the potential for upside from Domino's current low share price. This perspective suggests that the current market valuation may offer an attractive entry point for investors, with expectations for improvement in the company's financials and operations in the coming years.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.