UBS has again downgraded earnings for Domino Pizza Enterprises, cutting the target price -20% to $120 from $150.
But it upgrades to Buy from Neutral to reflect the strident retreat in the share price from nearly $165 in September.
The share price slumped after AGM commentary guided to weaker-than-expected Japanese earnings (courtesy covid), and rising inflation.
UBS maintains Domino’s growth prospects remain attractive despite headwinds, citing developed markets; same-store-sales growth; margin expansion; and new store growth. It also believes Domino’s experience in home delivery positions it well for structural ESG trends and believes the company is better positioned than many to manage rising inflation challenges.
FY22 EPS forecasts fall -8% and FY23 forecasts fall -11%.
Sector: Consumer Services.
Target price is $120.00.Current Price is $104.06. Difference: $15.94 – (brackets indicate current price is over target). If DMP meets the UBS target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
