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Why Did Stifel Raise Its Target Price for Domino’s Pizza?

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Jan. 18 2018, Updated 7:35 a.m. ET

Analysts’ target price

On January 16, 2018, Stifel analyst Chris O’Cull raised the 12-month target price for Domino’s Pizza (DPZ) from $225.00 to $240.00 while maintaining its “buy” rating. O’Cull has expressed confidence in the abilities of Richard Allison, who is expected to take over as the CEO of Domino’s Pizza after the retirement of J. Patrick Doyle on June 30, 2018.

O’Cull expects Domino’s to continue its strong performance, outperforming regional players in countries such as the US, the UK, Australia, and Mexico. The analyst has raised his 2018 EPS (earnings per share) estimate from $7.80 to $7.90.

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On the same day, Barclays raised its target price from $215.00 to $240.00. On January 11, 2018, Maxim, Deutsche Bank, and Nomura had raised their target prices. On January 16, analysts on an average expected the company’s stock price to reach $227.37 in the next 12 months. This forecast represents a return potential of 8.6% from its current stock price.

The target prices and return potentials of Domino’s peers are as follows:

  • Papa John’s (PZZA): target price of $69.00 with a return potential of 14.1%
  • Yum! Brands (YUM): target price of $84.30 with a return potential of 1.7%

Analysts’ ratings

Of the 21 analysts that follow Domino’s Pizza, 57.1% are recommending a “buy,” and 42.9% are recommending a “hold.” None of the analysts are recommending a “sell” option.

Currently, Domino’s is trading below analysts’ 12-month target price. However, this does not mean an automatic “buy.” Investors should thoroughly examine analysts’ estimates before making any investment decisions.

Next, we’ll look at Domino’s stock performance.

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