Domino’s Pizza (NYSE:DPZ) is exiting Russia, with its local franchise operator, DP Eurasia, announcing on Monday that it is pulling out of the country like several other companies did amid the conflict with Ukraine.
Domino’s Exits Russia
DP Eurasia, the London-listed company holding the rights to the Domino’s brand for Russia, Turkey, Azerbaijan, and Georgia, said that it has initiated bankruptcy proceedings for its Russian subsidiary DPRussia.
The move came after DP Eurasia failed to sell its Russian business. DP Eurasia announced in December 2022 that it was considering divestment of its Russian operations, as it evaluated the impact of Western sanctions. DP Eurasia limited further investment in Russia after sanctions were imposed in March 2022. It also disclosed that royalty payments from its Russian business had been suspended.
DPRussia, which is the third-largest pizza delivery company in the country, operated nearly 142 stores. DP Eurasia said that it was too early to determine the financial impact of the bankruptcy. However, it disclosed that its Turkish subsidiary had fully settled external debt of about 520 million roubles (about $5.56 million). This reduced DP Eurasia’s gross debt, resulting in a gross cash balance of 162 million liras ($5.97 million).
Citing data from Ukraine’s Kyiv School of Economics, the Financial Times noted that over 750 of the 3,400 foreign companies it has tracked have either sold their Russian businesses or ceased operations. However, the institute added that more than 1,400 companies were still operating their businesses in the country as usual.
Is DPZ a Good Stock to Buy?
Of the 19 Top Wall Street Analysts covering DPZ stock, 11 have a Buy rating, seven have a Hold recommendation, while one rates it a Sell. The TipRanks Star Ranking System assigns higher stars to Top Wall Street analysts based on their success rate, average return per rating, and statistical significance (number of ratings).
The average price target of top analysts for Domino’s is $414.89, which implies 9.2% upside. Shares have risen about 10% year-to-date.
