Takeaway pizza giant Domino’s Pizza Enterprises held its two-day Asia investor conference this past week in Japan, starting in Tokyo.
Domino’s pizza boss Don Meij recently held an Asia investor day when he named two new country heads for Japan and Taiwan.The online food delivery market is estimated to reach $35 billion by 2026 across Asia and Europe, from just $8.6 billion in 2017.The company’s stock rocketed higher during COVID-19 to a peak of $167.15 in September 2021, before crashing back to $62.40 on Monday. Despite the crumble, Domino’s is still up more than 13 per cent over the past five years.
“We value Domino’s Pizza ANZ at 25x, Domino’s Asia at 28x, Domino’s Europe at 29x with a Domino’s group EV/ EBIT multiple of 27.2x. In our view, this premium multiple vs peers is warranted given the company’s superior growth trajectory in developed markets,” he said.Cost of delivery remains the focus in all regions of its operations. Domino’s aims to reduce
Domino’s expects that delivery costs can be reduced by up to one third in every market, but Citi analyst Sam Teeger warned of sales dilution from these fortressed regions making the incremental additional profit from low delivery costs immaterial. Firetrail Investments portfolio manager Blake Henricks said Domino’s story is all about the store rollout and taking on aggregators, but the key issue is rising inflation.