Pizza restaurant chain, Domino’s Pizza (NYSE: DPZ) ticked higher in pre-market trading at the time of writing on Thursday after top-rated Stifel analyst Chris O`Cull upgraded the stock to a Buy from a Hold and raised the price target to $350, up from $320. The analyst’s price target implies an upside potential of 14.5% at current levels.
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Analyst Cull believes that the pizza chain will see delivery sales stabilize over the year and carry-out sales are likely to increase to record levels. The analyst has forecasted that commodity costs are likely to be lower while labor productivity could be high. This could boost the profitability of its franchises.
The analyst commented, “While many investors have focused on the increasing competition for a share in food delivery, we believe some may be overlooking the sizable opportunity for Domino’s to grow its market share in the carry-out segment.”
Cull also pointed out other potential catalysts for the stock including new initiative plans for franchisees, the relaunch of its app, and a loyalty program.
Analysts are cautiously optimistic about DPZ stock with a Moderate Buy consensus rating based on 12 Buys, eight Holds, and two Sells.
