JPMorgan Downgrades Domino's Pizza (DPZ) to Neutral
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JPMorgan analyst John Ivankoe downgraded Domino's Pizza (NYSE: DPZ) from Overweight to Neutral with a price target of $530.00 (from $425.00).
The analyst comments "After a great run, with shares up ~117% (vs ~54% SPX) since March 2019, we believe it is now time to lock-in profits at Domino’s Pizza. Stretching the target multiple to 30x on our new F23 EPS of $17.70 plus ending F22 cash yields a new December 2022 price target of $530/share, still below the post-EPS closing price of $538.55/share. Driving the +14.6% post-2Q earnings stock move was US system comps of +3.5% with 2Q21 v 2Q19 AUVs up ~19%. Evidently, order count was around flat vs 2Q20 and consumers added more items per transaction and absorbed more system pricing. Certainly, as is the case in all of QSR, the segment is benefitting from a rare combination of time and money and a lack of desire to cook at home (even if willing to eat at home). C22 into C23 for the segment may prove challenging as some of these lower-income consumer benefits experience a y/y wane."
Shares of Domino's Pizza closed at $538.82 yesterday.
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