Domino’s Pizza (DPZ – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Zachary Fadem from Wells Fargo reiterated a Hold rating on the stock and has a $465.00 price target.
Zachary Fadem has given his Hold rating due to a combination of factors impacting Domino’s Pizza’s current and future performance. The company’s first-quarter U.S. comparable sales were below expectations, and while international sales showed improvement, the overall macroeconomic environment remains challenging. The stock is already well-regarded, trading at a full price-to-earnings ratio, which limits the potential for significant upside.
Additionally, while Domino’s has low tariff exposure and some promising initiatives like the parmesan stuffed crust pizza and DASH rollout, the core U.S. business is experiencing a slowdown. The company’s initiatives have not yet translated into substantial growth, and the anticipated benefits from these efforts are more heavily weighted towards the second half of the year. Given these factors, Fadem sees limited risk/reward potential at the current valuation, leading to a Hold recommendation.
Based on the recent corporate insider activity of 88 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DPZ in relation to earlier this year.