What Today's Domino's Pizza Downgrade Means for Mutual Fund Investors (DPZ)

Welcome to MutualFunds.com. Please help us personalize your experience.

Select the one that best describes you

Your personalized experience is almost ready.

Join other Individual Investors receiving FREE personalized market updates and research. Join other Institutional Investors receiving FREE personalized market updates and research. Join other Financial Advisors receiving FREE personalized market updates and research.

Thank you!

Check your email and confirm your subscription to complete your personalized experience.

Thank you for your submission, we hope you enjoy your experience


Find the latest content and information here about the 2019 Charles Schwab Impact Conference.


Receive email updates about fund flows, news, upcoming CE accredited webcasts from industry thought leaders and more.

Content focused on helping financial advisors build successful client relationships and grow their business.

Content geared towards helping financial advisors build better client portfolios.

Get insights on the industry trends and investment news from leading fund managers and experts.



What Today's Domino's Pizza Downgrade Means for Mutual Fund Investors (DPZ)

Shauna O'Brien Jan 06, 2015

Before Tuesday’s opening bell, Domino’s Pizza (DPZ) was downgraded at Jefferies. Here’s what the move means for mutual fund investors.

Inside the Analyst Move

Jefferies has lowered its rating on Domino’s Pizza from “Buy” to “Hold,” but has raised its price target from $93 to $101. This new price target suggests a 6% upside from the stock’s current price. The analyst firm expects DPZ to report FY2015 EPS of $3.44 and FY2016 EPS of $3.96.

Analyst Andy Barish noted: "We have viewed Domino’s Pizza as the go-to stock in mid-cap global growth within the
industry and continue to regard it as one of the top-performing operators, with superior growth metrics (MSD-to-HSD SSS, 6% global system unit growth & visibly taking share in a very fragmented category).

“While we continue to think the company can deliver modestly better than expected SSS and EPS (cheese prices corrected sharply lower in 4Q 2014) through 2015 and 2016, we believe the multiple has expanded to reflect this opportunity (now trades at ~14.5x ’16 EV/EBITDA after the stock has jumped 30% since June 9).”

Expensive Valuation

Despite its growth potential, we view this stock as very expensive. The stock is currently trading at 28x 2015 earnings estimates and has a PEG around 5:1. We would assume that fund managers interested in DPZ would prefer to wait for a pullback.

Mutual Funds to Watch

Investors interested in DPZ may also consider one of the mutual funds listed below. These funds currently hold the largest stakes in the company.

The Bottom Line

The funds above allow investors to gain exposure to DPZ while remaining diversified. Investors interested in DPZ may also be interested in Papa John (PZZA) and Yum! Brands (YUM).

Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Please Enter Your Email
Please Select Your Advisor Type

Popular Articles

Download Our Free Report

Why 30 trillion is invested in mutual funds book