It has been a very disappointing year for the Domino's Pizza Enterprises Ltd (ASX: DMP) share price.
Since the start of the year, the pizza chain operator's shares have lost 50% of their value.
This leaves the Domino's share price trading within touching distance of its 52-week low.
Is the Domino's share price weakness a buying opportunity?
The team at Morgans continues to see significant value in the Domino's share price following its weakness in 2022.
In fact, according to a recent note, the broker has added the company to its best ideas list in September. This list is home to shares that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe and are supported by a higher-than-average level of confidence.
The note reveals that Morgans has an add rating and $90.00 price target on the company's shares. Based on the current Domino's share price of $60.82, this implies potential upside of 48% for investors over the next 12 months.
But it gets better. Morgans is expecting a $1.73 per share partially franked dividend in FY 2023. This equates to a 2.8% dividend yield, bringing the total potential return to over 50%.
Why is it bullish?
Morgans is positive on Domino's due to the company's positive long term growth outlook, which is being underpinned by its ongoing store network expansion. It explained:
DMP is the largest Domino's franchisee outside the US and one of the largest quick-service restaurant companies in the world. It is an affordable option that has performed well historically even in times of inflation or slower economic growth. The engine of DMP's growth is its ability to roll out new stores all over the world.
It added 438 stores to its global network in the year to June 2022, a pace of expansion that we forecast to accelerate to nearly 600 in FY23. This will take the total to almost 4,000 stores, up fourfold over a ten-year period. Over the next ten years, DMP expects to grow organically to 7,250 stores in the 13 countries in which it currently operates. This means DMP expects to more than double in size again by 2033, not including any future acquisitions.
