Can the Domino’s Pizza (ASX:DMP) share price go even higher?

Domino's Pizza share price

Over the last 12 months, the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price has been among the best performers on the S&P/ASX 200 Index (ASX: XJO).

During this time, the pizza chain operator’s shares have rallied a sizeable 49% higher.

Why has the Domino’s share price smashed the market?

Investors have been buying the company’s shares over the last 12 months due to its strong performance during the pandemic.

For example, during FY 2020, Domino’s delivered a 12.8% increase in network sales and a 21.4% jump in online sales.

This was driven by strong same store sales growth and a 6.5% to increase in its store network to 2,668 stores. This comprised 78 new stores in Europe, 75 new stores in Japan, and 10 new stores across Australia and New Zealand.

This ultimately led to the company reporting a 7.3% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $303.0 million. This was despite the company providing $14.1 million to support stores through the height of the pandemic.

Can the Domino’s share price go higher?

The good news is that the Domino’s share price has been tipped to go higher from here by one leading broker.

According to a note out of Bell Potter, its analysts have just reiterated their buy rating and $99.30 price target on its shares.

This price target represents potential upside of 20% over the next 12 months excluding dividends.

With group year-to-date (first 17 weeks) same store sales up 8.4% on the prior corresponding period, the broker feels the company is well-placed to deliver another strong result in FY 2021. It is forecasting a 20% year on year increase in net profit to $174.9 million.

And looking further ahead, Bell Potter notes that management has plans to double its store network organically over the next decade or so to 5,550 stores. It also believes the company could accelerate its growth inorganically through acquisitions.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Can the Domino’s Pizza (ASX:DMP) share price go even higher? appeared first on The Motley Fool Australia.

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