Domino's Pizza, Inc. (NYSE:DPZ) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in Domino's Pizza, Inc. (NYSE:DPZ) had a good week, as its shares rose 6.1% to close at US$446 following the release of its annual results. Domino's Pizza reported in line with analyst predictions, delivering revenues of US$4.5b and statutory earnings per share of US$14.66, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Domino's Pizza

After the latest results, the 26 analysts covering Domino's Pizza are now predicting revenues of US$4.81b in 2024. If met, this would reflect a satisfactory 7.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 6.3% to US$15.84. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.81b and earnings per share (EPS) of US$15.69 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.1% to US$471. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Domino's Pizza analyst has a price target of US$550 per share, while the most pessimistic values it at US$387. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 7.3% growth on an annualised basis. That is in line with its 6.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.5% per year. So although Domino's Pizza is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Domino's Pizza. Long-term earnings power is much more important than next year's profits. We have forecasts for Domino's Pizza going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Domino's Pizza that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.