Weekly Reports | Feb 14 2025
Broker Rating Changes (Post Thursday Last Week)
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DOMINO'S PIZZA ENTERPRISES LIMITED ((DMP)) Upgrade to Buy from Hold by Petra Capital.B/H/S: 0/0/0
Domino's Pizza's 1H25 trading update was in line with consensus, notes Petra Capital, with the company announcing savings of $15.5m from the closure of -205 stores and other cost savings of $18.6m.
Whilst France remains challenged, Japan (plus other Asian markets) appears to be past its lows, Germany is rebounding, and ANZ is holding against strong same-store sales, Petra observes.
The broker has factored in the store closures but made no material change to its net cost savings profile at this stage.
The analyst notes for the first time in a long while, there are now more markets showing positive trends vs negative, and hence lowered the beta used in its DCF valuation.
Target price rises to $40 from $32, and rating upgraded to Buy from Hold.
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NICK SCALI LIMITED ((NCK)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Nick Scali delivered a strong 1H25 result with net profit beating Jarden's forecast by 17%. Gross profit margin (GPM) for Australia/NZ of 64.4% beat the consensus of 62.8%, and the UK margin of 45.1% beat 42.9% consensus.
The broker notes trading update for Australia/NZ was weak but the outlook for UK margins remained strong.
The broker lowered FY25 net profit estimate by -2% and increased FY26 by 6%, driven by revenue downgrades on a slower store rollout and softer trading update, offset by GPM upgrades.
Target price rises to $18.5 but rating downgraded to Overweight from Buy on valuation and execution risk.
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