The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price was a very strong performer on Wednesday.
The pizza chain operator’s shares finished the day 7.5% higher at $105.00.
This means the Domino’s share price is now up 83% over the last 12 months.
Why did the Domino’s share price surge higher?
Investors were fighting to get hold of Domino’s shares yesterday following the release of a strong half year result.
For the six months ended 31 December, Domino’s delivered a 16.5% increase in total global food sales to $1.84 billion. This strong top line growth was driven by same store sales growth of 8.5% and the opening of 131 organic new stores.
Thanks to operating leverage, Domino’s earnings before interest and tax (EBIT) grew 32.3% to $153 million and its underlying net profit after tax increased 32.8% to $96.2 million.
While this was ahead of the market’s expectations, arguably what got investors most excited was management’s outlook commentary.
Domino’s CEO and Managing Director, Don Meij, advised that the company intends “to significantly outperform this strong result in the Second Half.”
Is it too late to buy Domino’s shares?
Although the Domino’s share price has rallied strongly over the last 12 months, analysts at Goldman Sachs believe it can still go higher.
According to a note out of the investment bank, this morning the broker retained its conviction buy rating and lifted its price target to $112.60. This compares to its previous price target of $88.00.
Goldman Sachs commented: “Although short term performance has been positively impacted by the pandemic, DMP is in an increasingly strong position as it builds on recent momentum and takes advantage of opportunities in the market. We forecast both Japan and Europe to deliver significant store and earnings growth over the next three years, amounting to 24% and 23% EBITDA CAGR to FY23.”
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
More reading
- ASX 200 down 0.5%: Domino’s delivers, Westpac impresses, Coles sinks
- Why Domino’s, EML Payments, Redbubble, & Westpac shares are storming higher
- Domino’s (ASX:DMP) share price higher after delivering strong first half growth
- Top brokers name 3 ASX shares to sell today
- Why CIMIC, Crown, Domino’s, & Praemium shares are tumbling lower today
Motley Fool contributor James Mickleboro 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 Bruce Jackson.
The post Leading broker tips Domino’s (ASX:DMP) share price to go even higher appeared first on The Motley Fool Australia.
from The Motley Fool Australia https://ift.tt/37jAX4z
Leave a Reply