Will Domino’s Pizza Enterprises Ltd break investors’ hearts on Valentine’s Day?

The future direction of the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is one of the more divisive subjects on the Australian share market at present.

There are some that believe it is cheap and likely to climb higher, then there are those that think it is still largely overvalued.

Thankfully investors won’t have long to wait to see which it is because the pizza chain operator is due to report its half-year results to the market on Wednesday of this week.

Will Domino’s break investors’ hearts on Valentine’s Day?

According to a broker note out of Deutsche Bank this morning, there is a chance that it could disappoint on Wednesday.

That note reveals that the broker has retained its sell rating and $36.00 price target ahead of the company’s earnings release. This price target implies potential downside of over 25% for its shares based on the current share price.

Deutsche’s analysts have continued to be bearish on Domino’s following the release of Yum! Brands quarterly results at the end of last week.

The US-giant has exposure to the Australian market through its Pizza Hut brand and the broker estimates that the arch rival of Domino’s delivered flat sales growth during the period. Which could indicate that the days of Domino’s gobbling up Pizza Hut’s market share are now over.

It is, however, worth noting that not everyone is bearish on Domino’s. A couple of weeks ago a note out of Morgan Stanley revealed that its analysts have an overweight rating and $60.00 price target on its shares.

Its analysts pointed to a stronger-than-expected quarterly update from Domino’s UK as a reason to be optimistic.

Should you invest?

Whilst I think that Domino’s would be a great long-term investment due to its strong market position and sizeable expansion plans, I wouldn’t recommend buying its shares just two days before its earnings release.

I would hold out until that release and consider buying fellow growth stars Bellamy’s Australia Ltd (ASX: BAL) and A2 Milk Company Ltd (ASX: A2M) in the meantime.

Lastly, if you like growth shares like Domino's then you'll love these hot stocks that have been tipped to shine in 2018.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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