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Analysts Favor ‘Hold’ Recommendation for Domino’s Pizza

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Aug. 18 2020, Updated 9:19 a.m. ET

Analyst recommendations

As of July 22, 2016, Domino’s Pizza (DPZ) was trading at $148.80. The share price may have already priced in the estimates we saw earlier in this series. Now let’s look at analyst recommendations and estimated price targets for Domino’s over the next 12 months.

The initiatives taken by Domino’s management and better-than-expected 2Q16 results have compelled analysts to raise their price targets for the next 12 months to $142.80. The earlier estimate was $131.20. Still, the new estimate represents a decline of 4% from its current share price.

On the higher side, John Staszak of Argus Research has estimated Domino’s share price to reach $165, a return potential of 10.9%. On the lower side, John Glass of Morgan Stanley has forecast that it will touch $130, which would be a fall of 12.6% from its current price.

Below are the return potentials of Domino’s Pizza’s peers over the next 12 months:

  • Yum! Brands (YUM): target price of $90.80 with a return potential of 0.8%
  • Papa John’s (PZZA): target price of $69.70 with a return potential of -4.9%
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Analyst ratings

According to a Bloomberg survey of 17 analysts, 23.5% recommended a “buy” for Domino’s stock. About 70.6% recommended a “hold,” and 5.9% recommended a “sell.” Since analysts have raised their target prices for the next 12 months, the price of the stock could also increase, and vice versa.

But remember, a share price that’s lower than the target price doesn’t mean you should automatically buy a stock. Before investing, you should carefully analyze the various metrics we’ve covered in this series.

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