Long Trade Idea
Enter your long position between $401.01 (yesterday’s intra-day low) and $408.00 (the intra-day low of its last bullish candlestick).
Market Index Analysis
- Domino’s Pizza (DPZ) is a member of the S&P 500 Index.
- This index trades near record highs but decreasing bullish trading volumes offer a severe warning about the health of the rally.
- The Bull Bear Power Indicator of the S&P 500 is bullish with a negative divergence and does not confirm the uptrend.
Market Sentiment Analysis
Equity futures are mixed this morning as big tech is pushing and pulling markets in both directions. Meta Platforms surged as much as 10% in after-market trading, while Microsoft plunged by over 7%. Apple will report after the bell, and markets also await earnings from Mastercard and American Express, which could provide a snapshot of consumer health and spending. The US Fed kept interest rates on hold as expected. Still, gold and silver continue to rally as safe-haven assets, alongside the Swiss Franc, as investors hedge against further geopolitical and economic risks.
Domino’s Pizza Fundamental Analysis
Domino’s Pizza is the world’s largest pizza chain, with over 21,000 locations across 83 countries and over 5,700 cities. It is well known for its 30-minute-or-less delivery promise.
So, why am I bullish on DPZ following its breakout?
I remain bullish about Domino’s digital strategy, which accounts for over 85% of US sales. I am equally bullish on innovative promotions during high-demand periods for carry-out orders, strategic partnerships, including DoorDash, and menu changes to reflect customer trends. Its “Hungry for MORE” strategy focuses on sales, store count, and profitability, driving franchisee profitability to currently average $162,000 per store, which can fund further expansion.
Metric | Value | Verdict |
P/E Ratio | 23.69 | Bullish |
P/B Ratio | Unavailable | Bearish |
PEG Ratio | 2.17 | Bullish |
Current Ratio | 1.61 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earnings (P/E) ratio of 23.69 makes DPZ an inexpensive stock. By comparison, the P/E ratio for the S&P 500 is 31.52.
The average analyst price target for DPZ is $486.52. It suggests good upside potential with manageable downside risks.
Domino’s Pizza Technical Analysis
Today’s DPZ Signal
- The DPZ D1 chart shows price action breaking out above its horizontal support zone.
- It also shows price action between its descending 0.0% and 38.2% Fibonacci Retracement Fan level.
- The Bull Bear Power Indicator turned bearish with an ascending trendline.
- The average bullish trading volumes are higher than the average bearish trading volumes.
- DPZ followed the S&P 500 Index higher this week, a bullish confirmation.
My DPZ Long Stock Trade
- DPZ Entry Level: Between $401.01 and $408.00
- DPZ Take Profit: Between $469.00 and $477.00
- DPZ Stop Loss: Between $374.82 and $382.47
- Risk/Reward Ratio: 2.60
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