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Analysts Favor a ‘Buy’ ahead of Domino’s Pizza’s Q2 Earnings

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Jul. 16 2018, Updated 9:03 a.m. ET

Price target

On July 12, Domino’s Pizza (DPZ) was trading at $279.03. That same day, analysts were forecasting a price target of $281.22, which represents a return potential of 0.8%. From the graph below, you can see that analysts have increased their price target from $238.58 in April to its current price target of $281.22. Strong same-store sales growth in the first quarter and measures adopted by management to drive sales appear to have compelled analysts to raise their price targets.

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Since the announcement of Domino’s first-quarter earnings, Guggenheim, Stifel, Citigroup, Barclays, Jefferies, Morgan Stanley, Deutsche Bank, and Mizuho have all raised their price targets. On July 12, Jefferies raised its price target to $255 and maintained its “buy” rating. Earlier, on June 15, Stifel increased its price target from $275 to $300, while Citigroup raised its price target from $232 to $281 on June 14.

Analysts’ ratings

Of the 20 analysts that follow Domino’s Pizza, 55% are favoring a “buy,” and the remaining 45% are rating it a “hold.” None of the analysts are rating it a “sell.” On June 8, Maxim Group downgraded the stock from a “buy” to a “hold.”

Domino’s stock moves in tandem with analysts’ ratings. When analysts upgrade the company, the stock rises, and vice versa. Investors are advised to analyze analysts’ estimates covered in the previous parts of this series before making any investment decisions.

Peer comparisons

The price target and return potential of Domino’s peers are as follows:

  • Papa John’s (PZZA) has a price target of $59.80 with a return potential of 11.4%.
  • Yum! Brands (YUM) has a price target of $88.58 with a return potential of 12%.
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