Analysts have issued a “buy” recommendation on Domino’s Pizza in the UK and Ireland with a target price of 285p, describing the company as a “safe haven in uncertain times”. Altium Securities said that the pizza chain’s shares had underperformed the market over the last month which it believed was unwarranted given its safe haven status. The broker has revised its estimates to assume 8% like-for-like growth for the full year 2008, on the back of an expected decline in the fourth quarter, followed by a forecast 4% like-for-like growth in 2009. In a note, Altium said that Domino’s was one of only two stocks it covered that had outperformed the market over the last year and that it believed the company was capable of continuing this impressive performance. It said that a combination of factors, including the quality of the proposition, an excellent marketing strategy and growing evidence of consumers trading down, meant that the group was well placed to continue outperforming despite the challenging consumer backdrop and the continuing tough comparatives.

Topics