Analysts’ estimates

Of the total 21 analysts who cover Domino’s Pizza (DPZ), 71.4% have given the stock “buy” recommendations, while 28.6% have given it “holds.” No analysts have given the stock “sell” recommendations. On average, analysts have given Domino’s a 12-month price target of $288.89, which represents a potential upside of 13.1% from its current price of $255.34 as of April 16.

On April 17, Morgan Stanley upgraded the stock to an “overweight” from an “equal-weight” rating and raised its price target from $268 to $283. Earlier, on March 19, JPMorgan Chase upgraded the stock from a “neutral” to an “overweight” while maintaining its price target at $270. Cowen also raised its price target from $290 to $295.

Analysts Favor a ‘Buy’ Rating ahead of Domino’s Q1 Earnings

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Peer comparison

Of the seven analysts following Papa John’s (PZZA), 71.4% have given the stock “buy” ratings, while the remaining 28.6% have given it “holds.” Analysts have given Papa John’s a 12-month price target of $53.33, implying a potential upside of 9.5% from its current price of $48.72.

Of the total 21 analysts that cover Yum! Brands (YUM), 38.1% have given it “buy” ratings, while 57.1% have given it “holds,” and 4.8% have given it “sells.” Analysts have given Yum! Brands a 12-month price target of $99.19, which represents a potential downside of 2.4% from its current price of $101.63.

Valuation multiple

The decline in Domino’s stock price since its announcement of its fourth-quarter earnings results has lowered its valuation multiple. On April 16, the company was trading at a forward PE multiple of 26.0x compared to its forward PE multiple of 29.2x before the announcement of its fourth-quarter earnings.

On the same day, Domino’s peers Papa John’s and Yum! Brands were trading at forward PE multiples of 39.5x and 25.7x, respectively.

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