Domino's Gets Goldman's Blessing Heading Into Earnings

Shares of Domino's Pizza, Inc. DPZ have gained 22 percent over the past year. Despite the strong outperformance versus major indices, Karen Holthouse of Goldman Sachs remains bullish on the pizza chain.

Holthouse commented in a note on Tuesday she remains "comfortable" with her prior 6.9 percent second quarter comps estimate. She added that this estimate roughly benchmarks Domino's to a 150 basis point deceleration. However, a more efficient ad spend could drive upside to the company's earnings.

Holthouse also noted a spike in search results for the term "Domino's car" which suggests a high return on investment on future initiatives.

In fact, among Domino's, Starbucks Corporation SBUX, Chipotle Mexican Grill, Inc. CMG and Dunkin Brands Group Inc DNKN, the analyst is only forecasting Domino's to report a better-than-expected earnings report when it reports its second quarter earnings on July 21 before market open.

The consensus estimate is calling for Domino's to earn $0.94 per share while Holthouse is modeling the company to earn $0.96 per share.

Holthouse maintained a Buy rating on shares of Domino's with an unchanged $139 price target.