Cautious Hold on Domino’s Pizza Amid Macroeconomic Pressures and Growth Uncertainties

Analyst Zachary Fadem from Wells Fargo maintained a Hold rating on Domino’s Pizza and keeping the price target at $450.00.

Zachary Fadem has given his Hold rating due to a combination of factors impacting Domino’s Pizza’s outlook. Despite the impressive 5.2% comparable sales growth in the third quarter, which met the high end of expectations, Fadem notes that the near-term upside is likely limited due to increasing macroeconomic pressures and slowing trends in the current quarter. Additionally, there is uncertainty surrounding the company’s ability to maintain growth through 2026, as achieving the projected 3% comps may require more optimistic assumptions than are currently justifiable.
Fadem also highlights that while Domino’s has been successful in gaining market share through initiatives like the ‘Best Deal Ever’ and new product launches, there are concerns about the sustainability of these strategies. The company’s margins have been affected by increased food costs and supply chain expenses, although there has been some improvement in operating income. Despite these challenges, Domino’s has reiterated its guidance for 2025, but Fadem maintains a cautious stance due to the ongoing macroeconomic uncertainties and potential risks in the longer term.

Fadem covers the Consumer Cyclical sector, focusing on stocks such as Domino’s Pizza, Brinker International, and Starbucks. According to TipRanks, Fadem has an average return of 10.5% and a 61.43% success rate on recommended stocks.