Citi downgrades Australia's Domino's to 'neutral', trims PT

Dominos Pizza Enterprises

10/12/2024 22:41

** Analysts at Citi downgrade Australia-based Domino's Pizza
Enterprises  DMP.AX  to 'neutral' from 'buy', trim PT by 11% to
A$33.25
    ** Brokerage says continued weakness in France is
"disappointing", particularly given co's recent initiatives
including launch of stores in Deliveroo and new lunch menu items
    ** Citi thinks the pizza chain needs to improve franchise
partner engagement and its consumer perception in France
    ** Adds that while data is showing some green shoots in
Japan, it is too early to turn positive on the market until co
can prove sustained same store sales growth
    ** Citi notes that as of Dec. 10, there were only 16 gross
store openings so far FY25, offset by 72 closures 
    ** Adds DMP will need to increase pace of its rollouts to
meet FY25 forecast of flat-to-slightly positive net new store
growth
    ** As of last close, stock down ~47% YTD

 (Reporting by Himanshi Akhand in Bengaluru)
 ((Himanshi.Akhand@thomsonreuters.com;))