The outlook for 2025 is expected to improve. Barron's magazine is bullish on Domino's Pizza, Inc. (DPZ.US).
"Barron's Magazine" suggests investors to buy Domino's Pizza (DPZ.US) stocks.
The Barron's magazine published an article on Tuesday, suggesting that investors buy shares of Domino's Pizza, Inc. (DPZ.US). The magazine stated that Domino's underperformance seems to be due to economic pressure rather than management errors.
According to analyst David Palmer from Evercore ISI, in the past three quarters, Domino's Pizza, Inc. has seen a same-store sales growth rate 4 to 8 percentage points higher than Papa John's International, Inc. (PZZA.US) and Yum! Brands, Inc.'s Pizza Hut. Palmer predicts that Domino's performance in the fourth quarter will also outperform its peers.
Barron's pointed out that Domino's has also made ordering and delivery more convenient for customers by partnering with Uber Technologies, Inc. (UBER.US) and DoorDash (DASH.US). Barron's stated, "Partnering with Uber Technologies, Inc. has brought in new customers for the brand, and the upcoming DoorDash project expected to launch in the second half of 2025 should provide new momentum."
Industry insiders revealed that another significant advantage of Domino's is that its mobile application seems to be superior to those of Pizza Hut, Papa John's International, Inc., and Little Caesars.
Looking ahead, investors may also need to focus on Domino's Pizza's potential for international market expansion. The global economic slowdown and strengthening of the dollar have led to disappointing global revenue for Domino's Pizza, but analysts still believe the company is in a favorable position.
It is worth noting that Domino's "Hungry for More" strategy requires the company to expand its store count by 5% each year, eventually reaching around 25,500 stores by 2028. The company, headquartered in Detroit, has a long-term goal for revenue to grow at a rate of 7% per year by 2027, with profit margins increasing to 19%.
Overall, Wall Street analysts have given Domino's a "moderate buy" rating with an average target price of $479.29, 11% higher than the current level.
As of the close of trading on Tuesday, Domino's had risen by 1.05% to $431.00. The stock has only accumulated a 5.9% increase so far this year, far below the S&P 500 index.
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