After Domino's Pizza (NYSE:DPZ) held its Investor Day event last week, analysts at Benchmark and Piper Sandler differed in their outlooks for the stock, with a downgrade and upgrade of the company's shares.
Piper Sandler cut DPZ to Neutral from Overweight, lowering the price target by just $1 to $400 per share.
Analysts said the event was "well put together" and that the downgrade is a valuation- and risk-reward-based decision, with the firm not being negative about the business or the strategy.
"While it is likely true that DPZ is one of the only (if not the only) restaurant concepts that is likely to have accelerating domestic SSS and unit growth next year (and kudos to management), we believe that this dynamic is very well understood at this point, and is also arguably priced into the shares at current levels," analysts noted. "While we can certainly see a path for the stock to grind higher depending on how the national launch with Uber Eats goes early next year, there is also risk tactical present in the event that something doesn't go well relative to expectations."
However, Benchmark is now bullish on DPZ, raising its rating on the stock to Buy and establishing a $455 price target on the stock.
Analysts commented that DPZ unveiled a more aggressive growth algorithm and a focused slate of strategic priorities.
"In what we expect will be a challenged economic environment for the consumer heading into FY24, we have a better appreciation for the company-specific drivers of same-store sales (SSS) growth that Domino's possesses going into the new year, including both benefits from the recent successful launch of a revamped loyalty program as well as the positive sales impact from the brand's nationwide launch on the Uber Eats platform at the start of FY24," analysts remarked.