Ahead of its second quarter earnings release on Thursday, Baird analyst David Tarantino voiced optimism on prospects for Domino’s Pizza ( NYSE: DPZ ).
Tarantino told clients on Tuesday that the brand’s “strong value proposition” and progress on shoring up labor shortages should keep the stock moving upward. He noted that staffing issues have constrained delivery sales in recent quarters, promoting upside possibility if the issue has indeed peaked. Overall, he suggested Domino’s ( DPZ ) stands to outperform even if overall consumer discretionary spending drops off.
In the immediate term, Tarantino was also bullish on the upcoming earnings report.
“Heading into Thursday's report, we are cautiously optimistic Q2 comps/EPS can reach low estimates, and we continue to believe the company is well positioned to fuel improving sales momentum in upcoming periods as comparisons ease and as newer strategic initiatives gain traction,” he wrote. “Perhaps most importantly, we think DPZ is positioned to perform relatively well in an economic downturn scenario, a profile that we think can help to support positive investor sentiment on the shares as 2022 unfolds.”
As such, Tarantino reiterated his "Outperform" rating on shares and assigned a $435 price target to the stock.
Shares rose slightly on Tuesday, adding to a 5.42% gain in the past week.
Read more on the earnings expectations for the restaurant chain .
For further details see:
Domino’s Pizza positioned to outperform in market down - Baird