Street View: BUZZ-Australia's Domino's Pizza: uncertain but also undervalued

Dominos Pizza Enterprises

03/07/2025 04:10

Updates

** Shares of Domino's Pizza Enterprises DMP.AX rise 3% to A$17.45 apiece by mid-day in Sydney, regaining their footing after plunging to more than 11-year low in the previous session

** Departure of CEO and managing director Mark van Dyck within a year of taking helm sparked the sell-off

   ** Stock's YTD losses at ~42%, including the day's moves

SLICE OF UNCERTAINTY

** Morgan Stanley says the departure "compounds the near-term uncertainty that DMP faces"

** Morningstar says "uncertainty is now likely to weigh for longer", but adds "believe the market is losing faith in this growth potential, leaving shares materially undervalued"

** Citi says it expects a "period of strategic uncertainty" until a new CEO is found; downgrades rating to "sell" from "neutral", cuts target price to A$14.20 from A$23.82

** Jefferies terms van Dyck's departure "a setback", but adds that Wednesday's plunge will be remembered as a "buying opportunity"

** Brokerage says that industry conditions are tough, but sees opportunity for significant cost-out, which should improve economics

 (Reporting by Sherin Sunny and Sameer Manekar in Bengaluru)

 ((Sherin.Sunny@thomsonreuters.com))