Shore Capital upgrades Domino's Pizza to 'buy' after 'reassuring' H1 results

(Sharecast News) - Shore Capital upgraded its stance on Domino's Pizza on Friday to 'buy' from 'hold' as it said the company's first-half results were reassuring, with good sales momentum, robust profit delivery and strong cash generation. "More importantly, they provide early evidence behind management's simplified MORE strategy: more customers, more frequency and more efficiency," the broker said.

"We see this as a cleaner and more credible equity story than the previous store rollout-led narrative, because it uses DOM's existing brand, digital customer base, store network and supply chain to drive higher order frequency, better franchisee economics and stronger cash generation."

Shore said that delivery on loyalty, supply chain productivity and deleveraging remains key, but the direction of travel is clearer and the risk-reward now looks more attractive, hence the rating update.

The broker has a 270p price target on the stock.

At 1115 BST, the shares were up 3.5% at 201.80p.