Oppenheimer analyst Brian Bittner is out with a research note on shares of Domino’s Pizza, Inc. (NYSE:DPZ), reiterating an Outperform rating and raising the price target to $240 (from 230), which represents a slight upside potential from current levels.
The note follows DPZ’s 4Q earnings report, which hit after the bell on Tuesday. Investors apparently liked what they saw in the report, sending shares higher nearly 4% on Wednesday.
Bittner commented, “Our DPZ thesis remains intact highlighted by fundamentals that are unmatched by restaurant peers. We expect system sales to grow a best-in-class 10%+ in ’18 and believe DPZ remains best positioned to generate mid-single SSS amongst our coverage. Near term, management downplayed concerns regarding negative implications of a PH-US turnaround given its superior positioning in a still fragmented pizza category. Mgmt also makes a strong case that Int’l remains very healthy and any SSS speed-bumps are fixable rather than structural issues.”
“Next recapitalization opportunity is in April (~$500M five-year notes), with tax reform potentially allowing the company to take leverage above its stated 3-6x target in short term, relative to ~5.5x currently. DPZ also put in place a $750M share repurchase authorization, which could be used in connection with a re-levering event,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Bittner has a yearly average return of 11.6% and a 69% success rate. Bittner has a 45.8% average return when recommending DPZ, and is ranked #142 out of 4761 analysts.
Most analysts back Bittner’s confident take on the biotech firm, as TipRanks analytics showcase DPZ as a Strong Buy. Based on 13 analysts polled in the past 3 months, 10 recommend Domino’s stock as a Buy, while 3 issue a Hold rating. However, the 12-month average price target is not that strong – $235.77.