Analyst Melinda Baxter from Morgan Stanley maintained a Sell rating on Domino’s Pizza Enterprises Limited and increased the price target to A$15.30 from A$14.60.
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Melinda Baxter’s rating is based on several factors impacting Domino’s Pizza Enterprises Limited’s financial outlook. The company aims to achieve significant cost savings, targeting around A$100 million annually, but only A$60-70 million has been identified so far, with A$50 million already implemented. Despite these efforts, the net benefit expected by FY26 is modest, around A$8 million, due to reinvestment plans and short-term challenges, such as reduced warehouse volumes.
Additionally, Domino’s new pricing strategy is negatively affecting same-store sales growth, which has declined by 1.2% in the first 17 weeks, falling short of market expectations. While the company is taking steps to address operational issues, the near-term headwinds and execution risks remain significant. Consequently, Baxter maintains a cautious outlook with a Sell rating, reflecting concerns over the company’s ability to successfully implement its strategies and improve franchisee profitability.
Based on the recent corporate insider activity of 7 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of DPZUF in relation to earlier this year.