Down 65% from its all-time high, are Domino’s shares a deliciously-priced buy?

Young couple having pizza on lunch break at workplace.Young couple having pizza on lunch break at workplace.

Shares of Domino’s Pizza Enterprises Ltd (ASX: DMP) have faltered in 2022. Domino’s shares now rest at 52-week lows to finish the week of trade.

After an impressive run, shares in the pizza giant reached all-time highs in September 2021, before tumbling in vertical fashion, much like many other ASX shares.

Domino’s now rests at $53.25 per share, more than 67% off the previous high of $161.98.

TradingView Chart

What’s happened to Domino’s shares?

It’s been a series of unfortunate events for the pizza giant. Most prominently, the broad sell-off in equity markets has been unkind to the share.

With the shift away from risk assets this year, more safe-haven assets such as the US dollar have flourished, leaving shares well behind.

Spurring the downside has been two central themes – inflation, and rising interest rates. Neither are good for retailers such as Domino’s and their shares.

As such, the stage was already set for a difficult year come 2022.

Then, the global pizza brand came in with a weak set of numbers in its FY22 results. It grew sales 4.6% globally year over year to $3.92 billion. However, this carried through to a 12.5% decrease in after-tax profit to $165 million.

This is classic of the impacts of inflation – greater revenues, due to the higher price of units sold, however, these costs are also recognised at the margin level for the company.

As a result of its FY22 performance, investors haven’t been keen to nibble at each consecutive drop in its share price.

Despite this, brokers still advocate buying the stock. Seven out of 14 analysts recommending it’s a buy, and the remaining seven saying to hold, per Refinitiv Eikon data.

The consensus price target from this list is $79.57, down from $89.35 in June. Nonetheless, the price target suggests a correction in the Domino’s share price, should they be right.

Citi certainly feels it’s a buy, and remains positive on the medium- to long-term outlook for the company. Consequently, it feels investors could be getting shares at a good price when fishing at its 52-week lows.

Citi values the company at $84.40, well above the consensus target.

Alas, we will have to wait and see the next moves yet, and if the analyst’s projections eventually are reflected in Domino’s share price.

The post Down 65% from its all-time high, are Domino’s shares a deliciously-priced buy? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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