Morningstar sees near-term challenges for Domino's' Japan, French operations

Dominos Pizza Enterprises

15/04/2024 22:12

** The full potential of fast-food retailer Domino's Pizza
Enterprises'  DMP.AX  Japanese and French operations is unlikely
to be unlocked in near term, says brokerage Morningstar
    ** Brokerage sees higher marketing costs in Japan to weigh
on near-term profit margins but expects store growth to recover
locally
    ** "We believe these challenges and weaker trading
conditions in some other markets are weighing on investor
sentiment" - Morningstar
    ** Trims FY25 EPS est. on DMP by 11% to A$1.88
    ** But brokerage says company's growth potential is
unaffected and keeps long-term earnings outlook unchanged;
retains A$61 fair value estimate
    ** Morningstar expects company's network to grow to 6,200
stores by FY33, vs management's long-term target of 7,100
    ** Company has 3,782 stores globally, according to FY23
annual report
    ** Stock down 34.5% this year, as of last close

 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))