Domino’s shares lift as UBS reiterates ‘buy’ rating despite store growth uncertainty
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The news: Shares in Domino’s Pizza Enterprises (DMP) lifted in afternoon trade as UBS analysts reiterated their ‘buy’ rating on the stock and left their 12-month target unchanged from $22, despite uncertainty on plans for new stores.
The numbers: Domino’s shares had lifted 1.7% to $18.44 at 2:44pm AEST but is still down 45% over the last 12 months.
The context: US-listed Domino’s Pizza Inc. (DPZ), which owns the Domino’s brand, released earnings for the second quarter of 2025 overnight.
This included 2.4% same store sales growth (SSSg) for DPZ International, which was above market expectations, as global stores adopted elements of the ‘Hungry for More’ strategy pursued in the US, according to a UBS research note.
However, stores under the master franchise of Australian-headquartered DMP “were not indicated as drivers of the strong international SSSg”. According to UBS, DPZ also noted that there remains uncertainty regarding DMP store network plans for new openings in financial year 2026.
The UBS analysts also said that “given uncertainty regarding the rate of sales growth, DMP is accelerating the pace of its cost savings”.
These savings will be directed into marketing and one third shared directly with franchisees to help boost earnings, considered a precursor to store growth.
UBS previously upgraded its position on the stock to ‘buy’ earlier this month off the back of the cost savings acceleration.
The sources: UBS research, Domino's Pizza Inc. 2Q25 financial results
