IBD Stock Analysis
- Domino’s flashing early entry of 521.08 from 50-day line
- Working on flat base with 548.86 buy point
- Fast-food and fast-casual chains have edge during pandemic
Industry Group Ranking
* Not real-time data. All data shown was captured at
2:26PM EDT on
Many restaurants have struggled during the Covid-19 pandemic as lockdowns hurt sit-down restaurants. But Domino’s, Chipotle Mexican Grill (CMG), Wingstop (WING) and other fast-food and fast-casual chains have done well as takeout and delivery orders climbed.
In a July 22 note to investors, Morningstar analysts highlighted Domino’s focus on carryout, allowing it “to compete with quick-service drive-thrus without having to pursue more expensive real estate.”
But analysts have warned that Domino’s aggressive expansion plans could end up being detrimental to current stores.
Still, Domino’s in July reported second-quarter earnings rose 4% year over year, along with its fifth straight quarter of double-digit revenue growth.
Domino’s Pizza is ranked No. 9 in IBD’s Retail-Restaurants group. Chipotle stock is No. 1. WING stock is third.
DPZ Stock Buying Opportunities
Shares rose 1.5% to 521.61 on the stock market today. DPZ stock is rebounding from its 50-day line, according to MarketSmith analysis. The stock is working on a flat base with a 548.82 buy point, following a gap-up on earnings in late July. But the 50-day rebound, and breaking a downward-sloping trend line, offers an early option. Investors could use 521.08, just above Friday’s high, as a DPZ stock early entry.
Chipotle stock has been trading very tightly near highs for several weeks following its late July earnings gap-up. CMG shares rose 1.15%. Wingstop briefly cleared a flat base on Wednesday, topping the 177.92 buy point. But WING stock reversed lower for a 1% decline to 176.10.
DASH stock rose 1.7% to 200.51, clearing a short consolidation within a much larger pattern.
Domino’s stock has a 78 Composite Rating out of a best possible 99 and an EPS Rating of 73. The Composite Rating compiles scores on key fundamental and technical metrics: earnings and sales growth, profit margins, return on equity and relative price performance. Investors should focus on stocks with a Composite Rating of 90 or higher.
Follow Gillian Rich on Twitter for energy news and more.
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