Stock Pick

  • Should you buy Domino’s shares right now?

    takeaway pizza

    The Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price has proved to be fairly resilient during the coronavirus crisis. Domino’s shares dropped as low as $41.66  in the early phase of the pandemic to be now trading back at $64.11. 

    Domino’s felt less of an impact than other global fast-food restaurant chains and stores who were required to close and are only now beginning to re-open.

    So, does the Domino’s share price offer value to investors right now?

    Getting back on track as coronavirus restrictions ease

    Domino’s most recent market update was in late April. It revealed that Australian store sales had been generally consistent prior to the crisis, with a small impact on local trading conditions. France, which one of the worst-hit European countries during the early phase of the crisis, had begun re-opening its stores. New Zealand stores have also re-opened and stores in Japan and Germany were able to maintain strong sales growth during the worst of the crisis.

    Domino’s had a key advantage over other fast food restaurant chains during the crisis as it doesn’t typically offer patrons a sit-down service. In addition, in-store pick-ups tend to be fast as they are optimised with an online ordering app with accurate pick-up times. Dominos also does a lot of home deliveries compared to other fast-food chains.

    This last update from Domino’s was 2 months ago. With lockdown restrictions easing in its operating markets, I think that trading conditions have likely picked up further.

    Medium-term growth outlook

    Domino’s did not provide any short-term guidance in its April update. However, it’s anticipating solid growth over the medium term. It forecasts new store openings to be in the range of 7% to 9% per year and store sales growth to be between 3% to 6% per year.

    So, are Domino’s shares in the buy zone right now?

    The Domino’s share price regained all its losses during the early phases of the pandemic. It is also trading close to 12-month highs, so it’s not cheap from a short-term perspective. However, it’s important to note that it is currently trading well below its all-time peak in mid-2016.

    I believe there’s strong potential for Domino’s shares to increase over the next 5 years through growing sales and a strong pipeline of future store openings.

    So, despite some possible short-term headwinds due to the coronavirus, I believe its share price is a buy right now.

    If Domino’s shares don’t take your fancy, perhaps take a look at the cheap shares suggested in our free Fool report below.

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    Motley Fool contributor Phil Harpur owns shares of Domino’s Pizza Enterprises Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Should you buy Domino’s shares right now? appeared first on Motley Fool Australia.

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  • Ahead of Apple’s iPhone 12 Launch, Top Analyst Says ‘Buy’

    Ahead of Apple’s iPhone 12 Launch, Top Analyst Says ‘Buy’Some good news just came Apple’s (AAPL) way. According to Wedbush analyst Daniel Ives, there finally appears to be some clarity regarding the highly anticipated launch of Apple’s flagship product, the iPhone 12 – its first to boast 5G capabilities.“While we were hearing of some delays over the past few months that would have pushed this key product cycle into the October/November timeframe, we now believe the iPhone 12 will be in late September with the smartphones ready to hit the shelves globally in early October,” said Ives.Ives was previously under the impression Apple was likely to push the launch back to the holiday period, on account of COVID-19’s impact on the global supply chain and the resultant depressed economic climate.However, the supply chain’s “impressive” return to normalization paves the way for Cook & Co. to kick off the 5G cycle as previously planned.Ives believes “there are 4 models being launched for iPhone 12 with a mix of 4G/5G with price points that potentially could be lower than $1,000 on some versions despite the additional 5G component.”As far as the 5G element is concerned, the US version will boast mmWave technology. Over the last month, Apple and its suppliers have smoothed out some lingering technology issues which is a “clear positive heading into this pivotal launch.”With the launch only a few months away, Ives summed up, “From a demand perspective, we estimate that ~350 million of Apple's 950 million iPhones worldwide are in this upgrade window which remains the linchpin to our longer-term bullish thesis and 5G super cycle for Cupertino over the next 12 to 18 months.”To this end, Ives rates AAPL an Outperform (i.e. Buy) along with a $375 price target. (To watch Ives’ track record, click here)So, that’s the Wedbush view, what about across the Street? Apple has a Strong Buy consensus rating based on 28 Buys, 4 Holds and 1 Sell. However, with Apple only recently notching an all-time high, the average price target of $336.46 now implies possible downside of 5%. (See Apple stock-price forecast on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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  • ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher

    man with head in hands after looking at stock market crash on computer, asx 200 share market crash

    At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) looks set to end its positive run. The benchmark index is currently down a disappointing 1.3% to 5,914.6 points.

    Here’s what happening on the market today:

    227,700 jobs lost in May.

    The ASX 200 has come under pressure after the Australian Bureau of Statistics released its unemployment data. According to the release, Australia lost a further 227,700 jobs in May, bringing the total number of unemployed people to 927,000. This has lifted the unemployment rate to 7.1%, compared to 6.4% in April and 5.2% in March.

    Bank shares tumble.

    A combination of this news and U.S. futures dropping notably lower appears to be weighing heavily on the banks today. All the big four banks are deep in the red at lunch and acting as a drag on the ASX 200. The worst performer in the group is the Westpac Banking Corp (ASX: WBC) share price with a 2.3% decline.

    Ord Minnett increases Afterpay price target.

    The Afterpay Ltd (ASX: APT) share price could still go higher from here according to one leading broker. A note out of Ord Minnett this morning reveals that its analysts have retained their buy rating and almost doubled their price target to $64.70. It believes Afterpay could have almost 10 million active customers on its platform by the end of the financial year. The Afterpay share price is up 1% to $58.34 at the time of writing.

    Best and worst ASX shares.

    The best performer on the ASX 200 on Thursday has been the A2 Milk Company Ltd (ASX: A2M) share price with a 3.5% gain. Earlier this week analysts at UBS suggested the infant formula company might outperform its guidance in FY 2020. Going the other way, the worst performer is the AP Eagers Ltd (ASX: APE) share price with a 5.5% decline on the back of no news.

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    Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher appeared first on Motley Fool Australia.

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