On Tuesday, Domino's Pizza Inc. (NYSE:DPZ) shares saw its price target increased by RBC Capital from $525.00 to $575.00, with the firm maintaining an Outperform rating on the stock.
This adjustment follows the company's reported first-quarter revenue and EBITDA/earnings per share (EPS) that exceeded market expectations, primarily due to stronger-than-anticipated U.S. comparable store sales (comps).
The positive performance in U.S. comps was largely attributed to higher volume, with pricing contributing a 0.9% boost. Additionally, the collaboration with Uber (NYSE:UBER) improved to 1.4%, marking a 1% increase from the previous quarter.
Despite these gains, RBC Capital noted that international challenges are expected to continue impacting the comps in the second quarter of 2024. However, these headwinds are predicted to lessen in the second half of the year, allowing for a projected 3% increase in comps.
Domino's management team confirmed their long-term growth guidance during the earnings call but indicated that margin expansion in 2024 might be limited due to additional investments in technology and capacity. In response to the company's solid performance and the management's outlook, RBC Capital has raised its estimates, leading to the new price target of $575 for Domino's shares.
InvestingPro Insights
Following the upbeat report from RBC Capital on Domino's Pizza Inc. (NYSE:DPZ), InvestingPro data and tips provide additional context for investors considering the company's stock. With a robust market cap of $18.36 billion, the company is trading at a high earnings multiple with an adjusted P/E ratio for the last twelve months as of Q1 2024 standing at 34.92. This indicator, coupled with a PEG ratio of 1.97, suggests that while Domino's growth expectations are factored into its price, the stock may be valued on the higher side relative to its near-term earnings growth.
InvestingPro Tips highlight that Domino's has consistently rewarded shareholders, raising its dividend for 10 consecutive years and maintaining dividend payments for 13 consecutive years. The dividend yield as of the latest data stands at 1.15%, with a significant dividend growth of 37.27% over the last twelve months. Additionally, the stock has experienced a significant return over the last week, with a 9.55% total price return, and is trading near its 52-week high, at 97.67% of the peak value.
For investors looking for more in-depth analysis and additional InvestingPro Tips, such as the company's liquidity position and long-term performance, visiting the dedicated Domino's page on InvestingPro could prove insightful. With the use of coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 16 more InvestingPro Tips available for Domino's, offering a comprehensive look at various aspects of the company's financial health and market performance.
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