![]() The Bloomberg consensus forecast is not quite as sanguine, but still upbeat on the EPS progression following strong COVID-related per-share profits in 20. On valuation, analysts at BofA see earnings climbing at a robust pace this year with an acceleration into 20. Still, the stock looks to be a better value today following a tough stretch since last the early 2022 peak when the Omicron variant reached a zenith. Other risks mainly surround competition in the fast-food pizza vertical and uncertainty with international growth. Tailwinds from Omicron, pricing changes, and an extra week in the first quarter may be transitory, so there are questions regarding the firm's momentum going forward. Domino's: Solid Sales Growth Ex-CurrencyÄriving the stock price lower intraday on Thursday was perhaps some cautious comments regarding the y/y comp. What's more, the firm reduced its share count and has an outstanding buyback facility in place. Still, Domino's has upside potential from its mix of domestic and non-US sales - global revenues were up a solid 5.9% (ex-currency hits). But other restaurants, like Chipotle ( CMG) and McDonald's ( MCD), are seeing much better volumes as consumers desire to get out of the house while also seeking value meals. Revenue was up just 1% year-over-year (below the inflation rate), which is sharply under what many wholesale food companies and grocers are seeing (so a shift back to at-home grocery could be at play). On April 27, Domino's reported a bottom-line beat while slightly missing on the top line. The Michigan-based $11.2 billion market cap Hotels, Restaurants & Leisure industry company within the Consumer Discretionary sector trades at a high 25.3 trailing 12-month GAAP price-to-earnings ratio and pays a small 1.5% dividend yield, according to The Wall Street Journal. The company had been benefiting from a steadily growing online/digital ordering mix that currently represents more than 60% of domestic orders and has a long runway for growth at times during the pandemic. DPZ's system is more than 97% franchised and 63% of stores are located internationally. FAH/FAHM Spread Now Favors GroceryĪccording to BofA Global Research, DPZ is considered the No.1 pizza delivery company in the world with roughly 16,000 stores in 50 states and more than 70 countries. ![]() Following an earnings drop after its Q1 report, shares look like a buy to me on valuation, and I highlight a key technical spot to watch. That favors grocery store stocks over eateries, but I see risks baked into the share price of Domino's Pizza ( NYSE: DPZ). Restaurant bills are now growing at a quicker pace than grocery costs. There are signs that the trend is reversing, however. Restaurants have enjoyed a period in which so-called "food-at-home" price rises have been steeper than inflation in the "food away from home" segment.
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