Domino's Pizza Enterprises Ltd (ASX: DMP) shares have rocketed 48% over the month to close at $21.78 on Friday.
This means the ASX 200 consumer discretionary share has recovered all of its losses since July when the CEO abruptly quit.
Domino's Pizza shares were already down when the company announced that Mark van Dyck would depart on 2 July.
He quit after just eight months in the job, in the midst of a company restructure to bring the food retailer out of its post-COVID slump.
The day before that announcement, Domino's Pizza shares closed at $20.14 apiece, down 32% in the year to date.
The next day, the Domino's Pizza share price was smashed on the news, tumbling 16% to close at $16.96.
That was Domino's lowest share price in more than 10 years and represented a year-to-date decline of 42%.
Jack Cowin, who is famous for founding Hungry Jack's and is the largest shareholder in Domino's, was chair of the board at the time.
The company announced he would step into an executive chair role and take the reins while the company searched for a new CEO.
The first few months under Cowin's leadership were rocky for Domino's Pizza shares.
The stock's price slumped to a 12-year low of $13.11 on 2 October, at which point, it seems investors saw compelling value.
Domino's Pizza shares have rallied 66% since then.
Cowin reassures investors at AGM
At the annual general meeting last Wednesday, Cowin told shareholders he was resetting the business "on a stronger foundation".
Cowin has made many changes, including installing "the most experienced management team in the food service business".
Domino's is transitioning from a discount voucher-driven business to everyday value pricing which will lift franchisees' profitability.
He commented:
A 70 cent increase per pizza sold in Australia will raise franchisee profits from about $120,000 to $150,000 per unit.
The plan is that enhanced profitability will lead to an expansion of new units in various markets. This is already underway in Germany and Malaysia.
Under new debt refinancing arrangements, Cowin expects free cash flow in excess of $100 million per annum.
He said the company's previous focus on expanding and setting up in new markets had been replaced by cost control and efficiency.
Cowin is confident that Domino's Pizza will exceed consensus FY26 NPAT forecasts, which would be a modest increase on FY25 NPAT.
Investors appear pleased with Cowin's progress, giving him 95% support in his re-election to the board at the AGM.
Here's what top brokers think of Domino's Pizza shares
Morgans described Cowin's AGM update as positive because the cost out was quantified and gearing metrics had improved.
The broker said:
The trading update was weak, with Same-Store Sales (SSS) growth still negative; however, we think this is somewhat irrelevant while the business transitions to its new pricing strategy to drive higher margin sales for franchisees given the noise around the short-term volume impact of less discounting (i.e. lost sales were unprofitable anyway).
The broker said Domino's Pizza shares had soared partly due to a media report that Bain Capital was interested in a takeover last month.
Domino's Pizza issued a statement denying the report and saying it had not been approached by the investment firm.
Despite that recent rapid ascent, Morgans noted that Domino's Pizza shares were still good value, and maintained its buy rating.
… the stock is still only trading on a FY26F PE of 16x which is a ~30% discount to Collins Foods Ltd (ASX: CKF).
With improving confidence in the turnaround, we continue to think the risk reward looks attractive from here.
UBS also retained its buy rating on Domino's shares and lifted its 12-month price target to $21.50.
Other brokers are less optimistic, with Jarden giving Domino's Pizza shares a neutral rating and a target price of $19.
Citi upgraded its rating from sell to neutral with a significantly improved price target of $19.85, up from $13.25.
