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magazineWe have increased confidence in DP Eurasia to thrive
DP Eurasia (DPEU) 229p
Loss to date: -0.4%
Original entry price: Buy at 230p, 9 November 2017
The operator of the Domino’s Pizza franchise in Turkey and Russia, DP Eurasia (DPEU) starts 2018 on a buoyant note after opening more stores and posting stronger than expected trading for 2017.
Among the reasons why we highlighted the stock in November 2017 was that it was on the cusp of achieving 50% of its sales online. Many Domino’s franchisees in other parts of the world have seen like-for-like sales accelerate when hitting this metric. The latest trading update (23 Jan) shows 51.8% of DP Eurasia’s group sales were achieved online last year.
More than 70 new sites opened during the year including the 500th Turkish outlet and 100th Russian store and like-for-like system sales growth was also robust; Turkey up 10% and Russia 28.9%.
Liberum has reiterated its 310p price target and ‘buy’ rating. Analyst Wayne Brown says: ‘Our confidence in forecasts is high, as not only is top-line beating expectations but strong operational leverage across all geographies is forecast. These should combine to deliver strong shareholder returns.’
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