Shares in Domino’s Pizza Group PLC (LON:DOM) fell again this morning after the pizza delivery giant was downgraded by heavyweight broker Citi.
The company’s share price had already slumped more than 10% last week following signs of a slowdown in sales growth in Domino’s full-year results.
UK like-for-like system sales, excluding the impact of split stores, rose 9.8% in 2016 but in the first nine weeks of 2017 that growth rate had fallen to 1.5%.
“The slowdown reflects a combination of tough comparatives, market softness and competitive pressure,” said Citi analyst Rahul Chopra.
“We expect the remainder of the first half may prove to be equally challenging…[and] further volume headwinds exist in the second half as pricing may be used to offset creeping food inflation pressure.”
Chopra notes that “Domino’s premium valuation leaves very little room for error”, hence why he’s downloaded his rating to ‘neutral.
The analysts added that it will likely stay this way until he sees evidence of an improving like-for-like trajectory.
Domino’s shares shed another 3% this morning to 337p.