Domino's Pizza Enterprises Ltd (ASX: DMP) shares started the week with another loss. The ASX consumer stock has slipped 1.5% to $16.14 at the time of writing.
That adds to an already painful stretch for investors. Domino's shares are now down about 23% in 2026 and roughly 36% over the past 12 months. In contrast, the S&P/ASX 200 Index has risen around 7% over the same period.
So, what's driving the weakness and is there any sign of a turnaround?
Image source: Getty Images
US Domino's weakness rattles outlook
The latest pressure appears to stem from offshore. An update from Domino's Pizza Inc (NASDAQ: DPZ) unsettled investors after the US giant reported same-store sales growth of just 0.9%, well below expectations of 2.3%. It also downgraded its full-year outlook, pointing to softer demand in a challenging consumer environment.
That matters more than it might seem. While Domino's Pizza Enterprises operates across Australia, Europe, and Asia, sentiment toward the broader brand is heavily influenced by US performance. If the world's largest Domino's operator is struggling to drive growth, investors worry similar pressures could be affecting other regions.
Cost-of-living pressures and weaker discretionary spending are key concerns. Pizza may be relatively affordable, but it is still discretionary, and consumers are increasingly tightening their budgets. That raises questions about order volumes, pricing power, and overall earnings growth across the network.
Time to buy Domino's shares?
After such a steep sell-off, Domino's shares are now trading at a significantly lower valuation multiple than in recent years. On the surface, that might suggest a buying opportunity. However, some analysts argue the lower price simply reflects a weaker growth outlook.
Bell Potter recently initiated coverage with a hold rating and an $18 price target. While acknowledging the more attractive valuation, the broker believes it is justified given expectations for only modest earnings growth in the near term.
Across the market, views remain divided. Data from TradingView shows that most analysts sit on the fence, with 10 out of 18 rating the stock as a hold. Five are more optimistic with buy ratings, while three recommend selling.
The average price target is about $20.07, implying potential upside of roughly 25% from current levels. But the range of forecasts is wide, stretching from bullish scenarios of around 77% upside to bearish calls suggesting a further 20% downside to about $13.00.
That spread highlights the uncertainty facing the business right now.
Foolish Takeaway
Domino's shares have been under sustained pressure, and the latest US update has only added to concerns about slowing demand. While the stock now looks cheaper, the key issue is whether the company can stabilise earnings and return to consistent growth.
Until that becomes clearer, Domino's may continue to sit in an uncomfortable middle ground — not quite cheap enough to be a clear bargain, but not strong enough to restore investor confidence.
