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Domino’s Pizza upgraded by UBS after woeful share price performance in 2018

Shares fell by more than a third last year, which means the pizza group is almost back down to where it should be, says UBS
pepperoni pizza
UBS has been encouraged by Domino’s market share, which has stabilised recently

Domino’s Pizza Group PLC (LON:DOM) took a hammering last year, so much so that UBS now reckons the pizza delivery firm is almost worth a punt.

Analysts at the Swiss bank have moved the stock up to ‘neutral’ from ‘sell’ given the pullback in its share price, although they stopped short of tipping it outright given concerns over pricing and franchisee discontent.

READ: Heatwave not a problem for Domino’s as Q3 sales jump

“Domino's Pizza had a challenging 2018, with concerns around franchisee profitability and the impact on the store roll-out, in particular, coming to the fore,” read a note to clients.

“With the shares down -35% in 2018 we believe that the risk-reward is now more balanced, with little now priced in for further store roll-out, and the latest UBS Evidence Lab App and Spend Tracker data showing some supportive trends including improved customer retention and frequent customers.”

Domino’s has been under growing pressure from the likes of Deliveroo and Uber Eats in recent years. But UBS’s data suggests its market share has now stabilised, as has its app ranking – an important metric for these food delivery firms.

Domino’s shares rose 3% to 258.1p on Thursday morning, just above UBS’s price target of 245p.

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Domino's Pizza Timeline

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