Street View: Still a ways to go for Domino's Australia franchise

Dominos Pizza Enterprises

05/11/2024 20:06

** Domino's Pizza Enterprises  DMP.AX , the franchise's
biggest operator outside of the U.S., said on Tuesday its
long-serving CEO Don Meij was stepping down
    ** Shares of the Australia-listed firm closed around 6%
lower at A$31.60 on Tuesday - lowest level since Sept. 19
    ** DMP also issued a weak trading print: same-store sales
down 1.2% in 17 weeks of FY25, vs growth of 2.7% pcp
    
    
    NOT OUT OF THE OVEN YET
    ** Jefferies says Meij's resignation is "positive because it
paves the way for the business to make the changes required to
improve unit economics and restore growth"
    ** Jefferies cut PT to A$43.00 from A$44.00, retains "buy"
rating
    ** Citi cuts PT to A$37.50 from A$38.50, retains "buy"
rating; slashes NPAT forecast by 3% to 5% for FY25-27, citing
slower sales 
    ** Morningstar Equity analyst Johannes Faul says market is
"overly discounting" DMP's long-term growth potential
    ** "Market is extrapolating current weakness and
underestimating the massive growth of its (DMP's) global
network," Faul says
    ** Seven of 14 analysts rate DMP "buy" or higher, four
"hold" and three "sell" or lower; their median PT is A$38.50 –
LSEG data
    ** DMP has lost 46.4% so far this year, significantly
underperforming the ASX 200 Consumer Discretionary index  .AXDJ 

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))