Domino's Pizza: An Under-Appreciated Revival Story, Says Oppenheimer
Analyst Brian Bittner of Oppenheimer has named Domino's Pizza as a top pick, raising the price target to $450, implying a 17.5% upside from Monday's closing price. Bittner believes that Domino's is an under-appreciated revival story heading into 2024, and he has elevated it to one of Oppenheimer's top picks. The optimism stems from the potential for same-store sales to surpass Wall Street consensus next year, driven by the relaunch of the loyalty program and the introduction of UberEats as an additional ordering option. Bittner suggests that better-than-expected performance could lead to positive earnings revisions and improved investor sentiment, while also validating unit growth.
A Turnaround and Promising Self-Help Cycles
Bittner's bullish call marks a departure from his previous cautious stance. He attributes his past pessimism to a downward revision cycle that he now believes has come to an end. He anticipates that Domino's will reverse the cycle and experience growth in the fourth quarter, as the company enters a promising self-help cycle that could be one of the most significant in years. However, Bittner acknowledges that the stock's performance could be impacted by increased competition, higher costs, or any negative shocks to consumer behavior.
Upcoming Events and Positive Outlook
While Bittner does not expect third-quarter earnings to provide upside, he highlights a positive event path following the earnings report. This includes Oppenheimer's visit to Domino's headquarters in November and an investor day in December. Bittner believes that following an updated analysis, earnings per share (EPS) estimates have bottomed and identifies self-help catalysts for a positive revision cycle. He is attracted to the optionality identified in Street's financial forecasts for 2024 and beyond, particularly considering the scenario analysis regarding new same-store sales (SSS) drivers.
In summary, Oppenheimer's renewed confidence in Domino's Pizza as an under-appreciated revival story reflects the potential for improved performance, positive earnings revisions, and enhanced investor sentiment. While challenges remain, the upcoming events and self-help cycles provide a promising outlook for the company's future growth.
Domino's Pizza: An Under-Appreciated Revival Story and Its Implications for New Businesses
Oppenheimer analyst Brian Bittner's recent endorsement of Domino's Pizza as an under-appreciated revival story heading into 2024 could have significant implications for new businesses, particularly those in the fast-food sector. Bittner's top pick rating and a raised price target of $450, indicating a 17.5% upside, underscore the potential for growth in the fast-food industry.
Strategic Moves and Operational Improvements
Domino's strategic moves, such as the relaunch of its loyalty program and the introduction of UberEats as an additional ordering option, could serve as a blueprint for new businesses. Bittner suggests that these initiatives have the potential to drive better-than-expected performance, leading to positive earnings revisions and improved investor sentiment. New businesses could learn from Domino's strategies to enhance their own operational efficiencies and boost growth.
Turnaround and Self-Help Cycles
Bittner's shift from a previously cautious stance to a bullish outlook on Domino's is tied to his belief that the company's downward revision cycle has ended. He anticipates a promising self-help cycle for Domino's, which could provide valuable insights for new businesses navigating their own growth trajectories. However, new businesses should also heed Bittner's caution about potential challenges such as increased competition, higher costs, and negative shocks to consumer behavior.
Positive Outlook and Upcoming Events
Despite not expecting an upside from Domino's third-quarter earnings, Bittner highlights a positive event path following the earnings report. This includes Oppenheimer's visit to Domino's headquarters and an investor day, both of which could reveal strategic insights for new businesses. Bittner's belief that Domino's EPS estimates have bottomed and his anticipation of a positive revision cycle could provide new businesses with a framework for financial forecasting and growth planning.