Domino's Pizza Enterprises Ltd (ASX: DMP) shares have dived in the last month, but is now the time to buy?
The Domino's share price has fallen 31% in a month and is now fetching $48.71. However, in Tuesday's trade, the company's share price lifted 5.57%. For perspective, the S&P/ASX 200 Index (ASX: XJO) lifted 0.83% yesterday.
Let's take a look at the outlook for Domino's in the next 12 months.
Can Domino's shares go higher?
Analysts at Barrenjoey have upgraded Domino's to an overweight rating from neutral.
Domino's shares appeared to rebound yesterday on the back of this news, as my Foolish colleague James noted.
The pizza chain operator's shares have fallen to an attractive level, Barrenjoey believes.
Barrenjoey has placed a $59 price target on Domino's shares over 12 months. This implies an upside of 21% based on Tuesday's closing price.
Analysts believe Domino's margins will recover as inflation pressures ease, the Financial Review reported.
The Domino's share price hit an all-time high of $161.98 in September 2021. Barrenjoey founding principal Tom Kierath believes it may not reach this level again before 2030. He said:
While it may not see those levels this decade, at $45 we think the market is currently pricing significantly lower growth.
The team at Morgans has also recently placed an add rating on Domino's with a $70 price target. Morgan's is also optimistic Domino's could recover as inflation alleviates.
Domino's reported a 14.3% drop in earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half of FY23. The company's board cut the company's dividend by 23.8% to 67.4 cents per share.
Domino's share price snapshot
The Domino's share price has descended 42% in the past 52 weeks and 26% year to date.
Dominos has a market capitalisation of about $4.3 billion at the current time.
