The Domino's Pizza Enterprises Ltd (ASX: DMP) share price was caught up in the selloff on Tuesday.
The pizza chain operator's shares dropped 2% to $64.89.
This means the Domino's share price is now down 47% since the start of the year.
Will the Domino's share price soon deliver?
While the Domino's share price hasn't been delivering for investors in 2022, the team at Morgans think investors should stick with it.
According to a note, the broker has retained its add rating but trimmed its price target to $93.00.
Based on the current Domino's share price, this implies potential upside of 43% for investors over the next 12 months.
'Absolutely undiminished' growth opportunity
While Morgans acknowledges that foot inflation and foreign exchange headwinds will weigh on its earnings in the near term, the broker feels that investors should look beyond this.
Instead, the broker thinks investors should be looking at the company's significant long term growth opportunity which is being underpinned by its store expansion plans. These plans will see the company aim to more than double its network in current markets between now and 2033.
Its analysts commented:
The near-term challenges of currency headwinds and inflation continue to intensify. We have lowered our EBITDA estimates by 2% in FY22F and 6% in FY23F to take account of these pressures (we now sit below consensus). This should not, in our view, take away from the significant longer-term opportunity for growth that DMP offers.
The engine of DMP's growth is the rollout of new stores. Although near-term store rollout may be slower than DMP would like, the medium-term opportunity is absolutely undiminished, as evidenced by the reiteration of the 2033 outlook today. DMP has developed a solid platform for inorganic expansion.
