Domino’s Pizza Q3 Shows Labor Challenges, International Growth – Analysts

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Stifel analyst Chris O’Cull pointed to labor shortage challenges both in staffing stores and building new ones, but reminded “that these issues are temporary in nature,” with international strength – boosted by a 8.8% same store sales number – offsetting the concerns. Stifel rates the stock a hold with a $485 price target.

Jeffries cut their price target for Domino’s from $522 to $500, citing the big domestic same store sales miss – -1.9% decrease vs. a consensus 1.6% growth – which looks worse on a two-year stack, with a 400bps drop Q/Q.

Analysts from BTIG, Oppenheimer, Morgan Stanley (NYSE:MS), Deutsche Bank (DE:DBKGn), Wells Fargo (NYSE:WFC), and RBC Capital all lowered their price targets, while Barclay’s raised its DPZ price target. No ratings changes have come in among this group.

Domino’s finished up .25% yesterday, rallying after a rough start due to the same-store-sales miss. The company is a perceived COVID beneficiary, with same store sales and EPS growth both accelerating in 2020 and through the first half of 2021. The question for investors is where that growth normalizes as the company laps that accelerated growth, and what eat-in demand might look like if pandemic concerns fade.

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