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Analysts disagree on Domino's Pizza stock price direction following earnings

Published 27/02/2024, 16:14
Updated 27/02/2024, 16:14
© Reuters.

Argus upgraded shares of Domino's Pizza (NYSE:DPZ) to Buy in a note to clients on Tuesday. At the same time, JPMorgan cut the stock to Hold as analysts at the firms differed in their view of the company's share price direction following its recent earnings release.

On Tuesday, Domino's reported Q4 EPS of $4.48, $0.10 better than the analyst estimate of $4.38. Revenue for the quarter came in at $1.4 billion versus the consensus estimate of $1.42 billion.

Argus raised its rating for the stock with a target price of $530, stating it reflects the company's economies of scale, early entry into the pizza delivery business and prospects for growth in international and domestic markets.

The firm also raised its 2024 EPS estimate to $16.50 from $15 and set a 2025 estimate of $18. "Based on the company's above-average margins and plans to open new stores over the next several years, our long-term rating is also Buy," they wrote.

Meanwhile, analysts at JPMorgan believe that most catalysts are priced into the stock. They raised their DPZ price target to $430 from $420 per share.

"We believe now is the right price to take profits," the firm wrote. "DPZ has been an idiosyncratic improving top-line growth story in our coverage in a broadly decelerating - mostly pricing driven environment."

"With stock now trading above the range we anticipated - and taking advantage of some negative tilted short-term 'positioning,' we downgrade shares to Neutral."

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