Domino’s Slips After Goldman Cuts Rating, Citing Tough Same-Store Sales

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By Dhirendra Tripathi

Investing – Domino’s (NYSE:DPZ) shares fell Tuesday following a downgrade by Goldman Sachs (NYSE:GS) which says the pizza and burger chain’s same-store sales will face some tough times near-term.

Analyst Jared Garber downgraded the stock to neutral from buy with a target of $450 on the stock. The target is still 7.6% away from its current level of $418.

The shares had run up 30% since March 5 and are just 6.6% away from their year’s high of $447.5.

Garber thinks the risk-reward profile on Domino’s is now fairly balanced at current valuation levels and points to potential volatility due to tough same-store sales comparisons on the near-term horizon.

Domino’s U.S. same-store sales rose 13.4% year-on-year in the first quarter of 2021. The international business posted a growth of 11.8% in its same-store sales.