UPDATE: Loop Capital Starts Domino's Pizza (DPZ) at Buy
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(Updated - October 5, 2021 4:22 PM EDT)
Loop Capital analyst Alton Stump initiates coverage on Domino's Pizza (NYSE: DPZ) with a Buy rating, PT $563.00.
The analyst comments "DPZ’s comps showed no signs of slowing down even as it lapped last year’s pandemic-driven sales boost. DPZ’s domestic 2-year stacks were up 15.2% in 1Q21 and more impressively accelerated to 19.6% growth in 2Q despite lapping a full quarter of the pandemic and the fact that most markets did in fact reopen by the end of June. Per the latest conversations with our domestic Domino’s franchisee contacts, while consumers did start to eat out more often as markets began to re-open, eating out vs. delivery/take-out trends did not return anywhere close to pre-pandemic levels. Also, a significant portion of independent pizza QSR operators were forced to close permanently during 1H21 due to the pandemic. We expect DPZ’s comps to continue to accelerate over the remainder of 2021 and beyond. Our franchisee contacts estimate as much as 7-8% of independent QSR pizza chains were forced to close during 1H21. If we conservatively assume DPZ captured just over 20% of this incremental revenue, in line with the company’s current domestic market share position, the associated sales lift equates to a 400-500 bp comp boost for Domino’s."
Shares of Domino's Pizza closed at $470.91 yesterday.
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