Deutsche Bank's Appetite For Domino's Pizza Grows Ahead Of Q4 Report

Domino's Pizza, Inc. DPZ is scheduled to report fourth-quarter results Feb. 20, but Deutsche Bank isn't waiting for the print to turn incrementally bullish on the pizza chain.

The Analyst

Deutsche Bank's Brett Levy maintains a Buy rating on Domino's Pizza's stock with a price target boosted from $220 to $235.

The Thesis

The main focus of Domino's' upcoming earnings report will be on the top line, Levy said in a Thursday note. (See the analyst's track record here.)

The domestic environment is also a priority for investors, and there are reasons to be concerned that the restaurant chain's same-store sales may have returned to levels that are more in-line with its long-term profile, Levy said. If that's the case, legitimate questions will arise as to whether the issues are temporary and out of management's control — like softer football ratings — or if the company is suffering from a systemic shift in customer behavior, the analyst said. 

Outside of the U.S., the restaurant chain appears to be in "relatively good shape," Levy said. 

The Deutsche Bank analyst said investors should have confidence in the following factors:

• Domino's Pizza's long-term prospects.
• Competitive advantages in the supply chain.
• Superior technology.
• The ability to drive market share by gaining same-store sales.
• A growing global footprint.
• A "solid" capital story.

Price Action

Shares of Domino's Pizza were up 4.45 percent Thursday afternoon. 

Related Links:

Credit Suisse Gains An Appetite For Domino's Stock

Nomura: International Expansion Could Drive Domino's Next Wave Of Growth

Photo courtesy of Domino's Pizza.