Source: Sharecast
Jefferies has trimmed its target price for Domino's Pizza Group following recently lowered guidance, but has kept its 'buy' rating on the stock on the back of its undemanding valuation.
The UK-based master franchise of the global takeaway chain reported on 6 August that full-year profit would be towards the lower end of the current range of market expectations after a slower start to the first half.
Market expectations at the time were for FY24 underlying EBITDA of between £144.3m and £149.2m, with a mean of £147.1m.
Jefferies said the new guidance implies a 2% cut to consensus estimates, and has cut its target price for the shares from 430p to 400p. Still, that new target price implies around 32% upside from current prices.
"Investors may wait for: 1) more evidence of increasing franchisee profitability translating into an acceleration in new store openings; and, 2) a sustained inflection around delivery growth," the broker said.
Nevertheless, the stock trades on a 5.1% free cash flow yield at 14 times full-year earnings, which Jefferies said is 30% below the historical average before Covid.
Plus500 announced a strong set of interim results on Monday, with significant financial growth, as it lifted its full-year expectations.
The FTSE 250 company reported an 8% increase in revenue year-on-year, reaching $398.2m, up from $368.5m in the first half 2023.
That growth was fuelled by a rise in trading income and customer activity, with customer income climbing 8% to $329.4m.
Group EBITDA grew 6% to $183.9m, maintaining a strong margin of 46%, while basic earnings per share jumped 18% to $1.90, reflecting improved profitability.
Plus500 said its cash reserves surpassed the $1bn mark for the first time, underlining its solid financial position.
The firm announced additional returns totaling $185.5m, comprising $110m in share buybacks and $75.5m in dividends.
Those returns brought the total for 2024 to $360.5m.
Plus500 said it continued to make strategic strides in key markets, particularly in the United States, where both its B2B and B2C operations were performing strongly.
It said it remained confident in the company’s outlook, projecting that full-year 2024 results would surpass current market expectations.
Market Movers
FTSE 250 - Risers
Plus500 Ltd (DI) (PLUS) 2,548.00p 4.77%
Future (FUTR) 1,074.00p 3.07%
Aston Martin Lagonda Global Holdings (AML) 147.40p 3.00%
Redrow (RDW) 782.00p 2.83%
Bloomsbury Publishing (BMY) 728.00p 2.54%
Bodycote (BOY) 660.00p 2.48%
Helios Towers (HTWS) 123.60p 2.32%
Dr. Martens (DOCS) 72.10p 2.27%
International Workplace Group (IWG) 172.40p 2.25%
Jupiter Fund Management (JUP) 84.50p 2.18%
FTSE 250 - Fallers
Bridgepoint Group (Reg S) (BPT) 300.80p -1.44%
Domino's Pizza Group (DOM) 297.60p -1.33%
Trustpilot Group (TRST) 193.80p -1.22%
Hilton Food Group (HFG) 960.00p -1.13%
Harbour Energy (HBR) 280.00p -1.13%
Auction Technology Group (ATG) 439.00p -1.13%
Playtech (PTEC) 639.00p -1.08%
Discoverie Group (DSCV) 641.00p -1.08%
Diversified Energy Company (DEC) 1,014.00p -1.07%
Monks Inv Trust (MNKS) 1,162.00p -1.02%