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Domino's stock pulls back after long-time bullish analyst said price is 'just too high' to buy

Shares of Domino's Pizza Inc. (DPZ) pulled back 3.2% in afternoon trading Friday, after analyst John Ivankoe at J.P. Morgan backed away from his long-time bullish stance on the pizza seller. "Price just too high, believe now is time to step away from shares," Ivankoe wrote, as he downgraded the stock to neutral after being at overweight since March 2019. The downgrade comes a day after the stock shot up 14.6% close at a record $538.82 on Thursday, after Domino's beat profit and revenue expectations (link), and announced a new $1 billion stock repurchase program. Still, Ivankoe raised his price target on the stock to $530, which is now 1.6% above current prices, from $425. He said current valuations are at the higher end of the typical multiple range for Domino's stock. "[A]t this point, we don't believe a sustained higher multiple or higher earnings relative to our optimistic assumptions warrants a risk of further upside in the stock beyond current levels," Ivankoe wrote. The stock has rallied 36.0% year to date, while the SPDR Consumer Discretionary Select Sector ETF (XLY) has gained 14.0% and the S&P 500 has advanced 17.4%.

-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com

 

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07-23-21 1410ET

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