Domino’s Pizza Group’s first-half results sparked confidence in Shore Capital analysts that the franchise’s plans for growth were working.
Analysts from the bank issued a 'buy' rating for Domino’s in a note on Tuesday, highlighting that the franchise appeared to be “making encouraging progress” on growth plans.
This includes a £30 million corporate store disposal, sustainable growth in franchisee earnings per store, wage increases and growth on its digital platforms.
Domino’s reported a 1.8% fall in revenue to £326.8 million on the back of a 0.9% fall in total orders over the first half in results on Tuesday.
Orders were said to have improved since May and into the second half though, with Shore Cap adding on-track plans to open 70 stores this year and easier comparables should aid Domino’s towards a stronger end to the year.
“We continue to see a compelling growth story in Domino’s,” analysts said.
Peel Hunt added recent weakness in Domino’s share price, which has fallen over 20% this year, now presented a “buying opportunity”.
A 425p share price target was set by analysts from the bank, up 38% on Monday’s close.