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What Impacts Domino’s Price Targets?

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Price targets

As of February 17, 2017, Domino’s Pizza (DPZ) was trading at $187.93. The share price might have already priced in the estimates we saw earlier in this series. Now, let’s look at analysts’ recommendations and the estimated price targets for Domino’s over the next 12 months.

Better-than-expected 3Q16 earnings and Domino’s initiatives to drive same-store sales growth appear to have compelled analysts to raise their price target for the next 12 months. As of February 17, 2017, analysts expect Domino’s stock price to touch $175.4 in the next 12 months—a fall of 6.7% from its current stock price. Before its 3Q16 earnings, analysts expected a target price of $145.9.

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

  • Yum! Brands (YUM) – target price of $69.37 with a return potential of 1.4%
  • Papa John’s (PZZA) – target price of $88.57 with a return potential of 3.0%
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Analysts’ ratings

Of the 18 analysts that follow Domino’s, 33.3% gave Domino’s a “buy” recommendation and 66.7% gave it a “hold.” None of the analysts gave it a “sell” recommendation. Domino’s share price moves in tandem with analysts’ recommendations. As analysts raise their 12-month target prices, Domino’s stock should also rise and vice versa.

It’s important to remember that a share price that’s higher than the target price doesn’t mean you should automatically sell a stock. Before making any investment decisions, you should carefully analyze the various metrics that we covered in this series.

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