KeyBanc Starts Domino's Pizza (DPZ) at Hold; Growth Potential, But Shares Already Trade at Premium

KeyBanc initiates coverage on Domino's Pizza (NYSE: DPZ) with a Hold.

KeyBanc analyst says, "We view both Domino's near-term outlook and long-term growth potential favorably. However, we believe that shares may have limited upside potential in the near term, as investors will likely be cautious due to the fact that starting in 1Q12, the domestic system will be lapping two consecutive years of strong SSS and an impressive 260 bps improvement in operating margins from the 12.9% trough in 2008 to our estimate of 15.5% in 2011, which represents peak levels. Looking forward, we expect impressive franchised international growth to continue to produce new peak operating margin levels in the coming years, with our projections of 16.0% and 16.8% in 2012 and 2013, respectively. However, with shares trading at a premium to peers, we believe that potential upside to shares will remain muted until the Company proves in the coming quarters that this momentum will continue."

For an analyst ratings summary and ratings history on Domino's Pizza click here. For more ratings news on Domino's Pizza click here.

Shares of Domino's Pizza closed at $32.94 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Domino's Pizza (DPZ) PT Raised to $475 at Wells Fargo
• Dunes Point Capital, LP has sold the manufacturing business of Harvey Building Products to Cornerstone Building Brands
• Goodwill of the Olympics and Rainier Region Receives $300,000 Grant From KeyBank for Clean Energy Initiative