It’s time to buy Domino’s Pizza, according to Stifel. Analyst Chris O’Cull upgraded the pizza delivery giant to buy from hold. He also increased his price target to $350 from $320, implying 14.4% upside from Wednesday’s close. O’Cull thinks that “over the next 12 months, the company will stabilize delivery sales and continue growing carryout sales to new record levels. Better sales performance, lower commodity costs, and higher labor productivity should boost franchisee profitability, sparking greater unit growth.” The analyst pointed out that Domino’s shares have “performed poorly since 2021 as delivery sales have declined.” In that time, the stock is down 20%. DPZ mountain 2020-12-31 DPZ since 2021 O’Cull added that while he does not expect the company’s second-quarter results to show evidence that delivery sales are stabilizing — which would be a “key catalyst” for shares — he sees lower costs providing a boost to near-term earnings as Domino’s introduces new initiatives in the second half of 2023. “Carry-out sales should continue to be a significant growth opportunity,” O’Cull said. “While many investors have focused on the increasing competition for 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.” New initiative plans for franchisees and a loyalty program and app relaunch later this year should also drive better results, according to Stifel. Domino’s shares were up 2% Thursday during premarket trading. The stock is down more than 11% year to date. —CNBC’s Michael Bloom contributed to this report.
