Domino's Pizza Faces Tough Comps Ahead Of Q4: Analyst
Domino’s Pizza Inc (NASDAQ:DPZ) shares are trading lower on Wednesday. The stock is reacting to Guggenheim analyst Gregory Francfort reiterating the Neutral rating on the stock, but lowering the price forecast from $490 to $450.
The company will report fourth quarter results on February 23 at 8:30 a.m.
Analyst Take
Analyst Francfort trimmed earnings forecasts modestly for both 2025 and 2026. He cut the price forecast, citing industrywide pressures expected to linger into the second half of 2026.
Francfort said valuation looked more balanced when shares dipped below $400 earlier this month.
He noted downside risks now appear more limited despite ongoing pizza category and consolidation headwinds.
Tougher mid-February comparisons tied to last year’s “Best Deal Ever” could offer a better entry point.
The analyst said Domino’s posted a strong third-quarter U.S. comparable sales gain but expects slower momentum in the fourth quarter.
He now models quarterly same-store sales growth below consensus due to softer industry demand.
Francfort said calendar shifts, weather changes and promotion timing complicate near-term trend visibility.
He added January’s carryout-focused Boost Week coincided with unusually cold conditions, limiting traffic benefits.
Can Domino’s Navigate Industry Headwinds?
Looking ahead, Francfort expects early 2026 trends to improve modestly, supported by tax refund season.
Francfort noted Domino’s trades at a valuation discount to major quick-service peers.
He attributed the gap to slower global unit growth and concerns about long-term pizza category expansion.
The analyst said third-party delivery has intensified competition across cuisines, pressuring historical growth rates.
Despite that, Francfort said Domino’s U.S. pizza market share has increased since the pandemic.
He believes further gains remain possible as competitors like Pizza Hut and Papa John’s International, Inc. (NASDAQ:PZZA) struggle.
A potential Pizza Hut divestment could accelerate store closures and indirectly benefit Domino’s sales.
Still, Francfort cautioned that any share gains may only partially offset fading promotional benefits from 2025.
He estimated competitive closures could add incremental sales growth but unlikely restore past peak momentum.
On capital structure, Francfort does not expect new debt issuance in 2026 amid elevated interest rates.
DPZ Price Action: Domino’s Pizza shares were down 2.36% at $404.10 at the time of publication on Wednesday, according to Benzinga Pro data.
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