Domino’s Pizza Enterprises Limited (DPZUF – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Melinda Baxter from Morgan Stanley maintained a Buy rating on the stock and has a A$40.00 price target.
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Melinda Baxter’s rating is based on a combination of strategic cost management and valuation adjustments that support a positive outlook for Domino’s Pizza Enterprises Limited. The company has announced significant cost savings through store optimization and cost base simplification, projecting savings of A$14.9 million. This move, along with the closure of 205 loss-making stores, is expected to streamline operations and enhance profitability.
Although there is some uncertainty regarding how these savings will impact the bottom line versus reinvestment in franchisee profitability, the valuation assessments remain favorable. The price-to-earnings valuation has been adjusted to A$37.00 per share, while the discounted cash flow valuation has increased to A$43.00 per share. These valuations, alongside a steady price target of A$40 per share, underpin Melinda Baxter’s Buy rating for Domino’s Pizza Enterprises Limited, suggesting a balanced risk-reward profile for investors.
According to TipRanks, Baxter is an analyst with an average return of -6.2% and a 33.66% success rate. Baxter covers the Consumer Defensive sector, focusing on stocks such as Woolworths Group Ltd, Coles Group Ltd., and Treasury Wine Estates Limited.