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Mastercard’s shares decline despite upbeat results
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Tesla’s stock surges after upbeat Q4 print
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Is there a golden opportunity with Shopify?
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Investors unimpressed by Microsoft’s earnings beat
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How should you play the NASDAQ 100’s moment of truth?
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Baker Hughes shares decline amid weak Q4 print

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Asset Watch

Should you feed your portfolio some Domino’s Pizza?

 

Thursday, January 5, 2023

While the New Year began with a whimper for U.S. equities, Bank of America named Domino’s Pizza – the largest pizza chain in the U.S. – one of its top 10 U.S. stock ideas for the first quarter of 2023. On Jan. 3, analyst Sara Senatore wrote:
“Relative to the S&P, DPZ is trading at a 1.4x multiple, slightly above its 5-yr average of 1.3x but in line with its 10-yr average. We expect, however, that estimates will be revised higher as sales accelerate and costs come down.”
If her price target of $448 is reached, it implies a more than 30% upside from the Jan. 3 closing price.
However, with sentiment increasingly frail, should you wait for a more attractive entry point?

Domino’s Pizza lost its 20-day moving average in early December and has been stuck in a downtrend ever since. When the stock sunk below its 20-day MA in January, it took roughly five months before a sustained rally occurred. Similarly, when a similar breakdown below the 20-day MA occurred in late August, it took roughly two months before a sustained rally occurred.

It’s now been less than a month since the most recent breakdown unfolded, and if history is any indication, more weakness could be on the horizon.

So, should you wait for a pullback near the May ($323) and October ($300) lows before making your move?


Site by Pink Green
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