Domino's Pizza Inc. (NYSE: NYSE:DPZ) saw its price target slightly reduced from $450.00 to $455.00 by investment firm Jefferies, while the Hold rating on the stock was reiterated. The adjustment follows the company's financial performance which reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of $220 million, a figure that aligns with consensus expectations.
This result came as lower revenues, due to a miss in same-store sales (SSS) and unit growth, were balanced by improved company-owned restaurant margin (Co RLM) and supply chain margin.
The guidance for 2024 was revised downwards, and the initial outlook for 2025 was also set slightly below the long-term algorithm.
Jefferies considers this a reasonable early assessment, given the international challenges and current market visibility. The firm has chosen to maintain its EBITDA estimates for Domino's Pizza below consensus for both 2024 and 2025.
Domino's performance and future outlook are being closely watched by investors, as the company navigates through a competitive food industry landscape. With international headwinds and a clear view of the market situation, the updated guidance and price target offer insights into the company's expected financial trajectory in the near term.
In other recent news, Domino's Pizza reported third-quarter earnings per share of $4.19, surpassing the estimated $3.65. However, the company witnessed a 3% increase in U.S. same-store sales, falling short of the projected 3.6% increase, and a 0.8% increase in international sales, missing the anticipated 2.9% growth.
Amid these results, various analyst firms adjusted their price targets. TD Cowen maintained a Buy rating with a price target of $475, emphasizing Domino's strong strategic approach and potential to thrive in the quick-service restaurant sector.
BTIG reduced the stock's price target to $500 from the previous $580, while still recommending a Buy rating. Evercore ISI maintained its Outperform rating with a steady price target of $480, Citi revised its price target for shares of Domino's Pizza to $440 from the previous $450 while maintaining a Neutral rating, and Goldman Sachs maintained a Buy rating on Domino's shares with a price target of $515.
InvestingPro Insights
Domino's Pizza's financial health and market position offer additional context to Jefferies' analysis. According to InvestingPro data, the company boasts a market capitalization of $14.3 billion and a P/E ratio of 25.4, suggesting investors are willing to pay a premium for its earnings. This valuation is further supported by Domino's strong financial performance, with a revenue of $4.61 billion over the last twelve months and a robust operating income margin of 18.5%.
InvestingPro Tips highlight Domino's commitment to shareholder returns, having raised its dividend for 11 consecutive years and maintained payments for 13 years. This consistent dividend growth, coupled with a current yield of 1.48%, may appeal to income-focused investors despite Jefferies' Hold rating.
While Jefferies has slightly lowered its price target, it's worth noting that the InvestingPro Fair Value for Domino's stands at $398.37, indicating potential alignment with current market prices. The company's ability to generate high returns over the last decade, as pointed out by InvestingPro Tips, supports its resilience in a competitive industry.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Domino's Pizza, providing deeper insights into the company's financial health and market position.
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