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P&G shares rise despite Q3 sales miss

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Trends & Analysis
News

P&G shares rise despite Q3 sales miss

News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

Asset Watch

Time to order Domino’s Pizza?

Tuesday, February 28, 2023

With a difficult macroeconomic environment separating the haves from the have-nots, Domino’s Pizza felt investors’ wrath on Feb. 23. After reporting fourth-quarter revenue that was below analysts’ consensus estimate, during the Q4 conference call, CFO Sandeep Reddy said:
“Given the current macroeconomic headwinds that are impacting our U.S. delivery business in particular, we are updating our two to three-year outlook from 6% to 10% global retail sales growth to 4% to 8% global retail sales, and unit growth from 6% to 8% global net unit growth to 5% to 7% global net unit growth.”
But even though the fundamental weakness is troubling, haven’t we seen this movie before?

When a weak Q1 earnings print hit the wire on Apr. 28, the stock traded 10% lower intraday before ending down by more than 5%. Similarly, while an intraday rally didn’t occur this time around, the nearly 12% decline on Feb. 23 was another example of investors’ disdain for the disappointing performance.

However, the price action from mid-May through August showed that after Domino’s Pizza found a bottom roughly three weeks after the April print, buying the weakness proved profitable for the optimists.

Likewise, the large gap on the chart’s right side shows a similar setup. And while the stock closed below its October low on Feb. 24, there is support in the $280 range.

So, should we expect another reversal, or will investors be more spiteful this time around?


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