Morgan Stanley Boosts Domino's Pizza Price Target By 5% On Strong Long-Term Outlook
Portfolio Pulse from Shivani Kumaresan
Morgan Stanley analyst Brian Harbour has reiterated an Overweight rating on Domino's Pizza Inc (DPZ) and increased the price target from $435 to $455, citing a strong long-term outlook. The analyst highlighted DPZ's strategic details, financial goals, and positive near-term indicators from its first investor day in years. DPZ is expected to continue gaining market share and aims for over $3 billion in incremental sales over the next 5 years. The partnership with Uber Technologies Inc (UBER) is also seen as a positive contributor to sales. DPZ's new long-term algorithm through 2028 includes a 7%+ global retail sales growth, 3%+ same-store sales growth, and 1,100+ annual net unit growth. The company targets $400 million incremental operating income by 2028, driven by top-line growth, disciplined investments, and moderate margin expansion post-2024. Internationally, DPZ aims for over $4 billion incremental sales through FY28, with significant growth expected from China and India. Technological advancements, including automation and AI, are seen as potential boosts for customer and store operations. Despite the positive outlook, DPZ shares were trading down by 1.94% at $394.22.
December 08, 2023 | 6:45 pm
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NEUTRAL IMPACT
Uber Technologies Inc's partnership with Domino's Pizza is expected to contribute to DPZ's sales, as noted by Morgan Stanley's analyst.
While the partnership with Uber is mentioned as a positive factor for Domino's sales, the article does not provide specific details on the financial impact for Uber. Therefore, the short-term impact on Uber's stock is likely to be neutral, as the news is more focused on DPZ's growth and not directly on UBER's financial performance.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Morgan Stanley has raised Domino's Pizza's price target from $435 to $455 and maintained an Overweight rating, reflecting confidence in the company's growth strategy and market share gains.
The price target increase by a major analyst like Morgan Stanley typically signals confidence in the company's future performance and can positively influence investor sentiment in the short term. The detailed growth strategy and positive outlook presented during the investor day add credibility to the analyst's rating, which may lead to an increase in stock price.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100