Market Overview

Nomura: International Expansion Could Drive Domino's Next Wave Of Growth

Share:
Nomura: International Expansion Could Drive Domino's Next Wave Of Growth
Related DPZ
BTIG Says Wingstop's Stock Has Gone 'Too Far Too Fast'
Podcast: Do Millennials Have A Love Affair With Stocks And Bitcoin?

Domino's Pizza, Inc. (NYSE: DPZ) stock is soaring following an analyst upgrade. The Ann Arbor, Michigan-based pizza chain is benefitting from investments in technology, making it more attractive for international franchisees to buy rival franchises and switch them over to the brand, according to Nomura. 

The Analys

Mark Kalinowski of Nomura upgraded Domino's from Neutral to Buy and maintained a $201 price target.

The Thesis:

After a 21-percent pullback from its five-week highs in late June, Dominos shares are now more attractive, the analyst said. (See Kalinowski's track record here.) 

International expansion provides Domino’s with unit growth without extra corporate commitment of capital, Kalinowski said. 

“As Domino’s continues to grow, we believe that this is placing more competitive pressure on local and regional international pizza chains. These chains simply lack the scale and resources to effectively compete with Domin’s as digital ordering has become increasingly important to customers ordering pizza for delivery." 

The pizza chain offers "meaningfully better unit growth and the likelihood of better same-store sales growth" than competitor YUM! Brands, Inc. (NYSE: YUM), Kalinowski said. Domino’s is expecting worldwide annual unit growth in the 6-8 percent range.

Price Action:

Shares of Domino’s traded up over 6 percent following the upgrade, and were at $183.27 at last check. 

Related Links: 

Domino's Pizza Pullback Gives Maxim Group An Appetite

Papa John's CEO Blames NFL For Slowing Pizza Sales; Should He Really Blame Netflix?

Latest Ratings for DPZ

DateFirmActionFromTo
Aug 2018CitigroupMaintainsNeutralNeutral
Jul 2018JP MorganMaintainsNeutralNeutral
Jul 2018BarclaysMaintainsEqual-WeightEqual-Weight

View More Analyst Ratings for DPZ
View the Latest Analyst Ratings

Posted-In: Mark Kalinowski Nomura PizzaAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (DPZ + YUM)

View Comments and Join the Discussion!

3 Reasons Wedbush Downgraded Autodesk

Snapchat's Evan Spiegel: Newsfeeds Came At Huge Cost 'To Facts, Our Minds And The Media Industry'