** Shares of Domino's Pizza Enterprises DMP.AX jump as much as 10% to A$21.03, their highest level since June 12

** Brokerage Citi upgrades the stock to "neutral" and Morgan Stanley raises earnings estimates, both citing operational and balance sheet improvements

** Stock second-biggest percentage gainer in the benchmark S&P/ASX 200 index .AXJO

** Citi highlights improved franchisee profitability from the "Everyday Low Prices" model and reduced balance sheet risks following the company's debt refinance

** Morgan Stanley increases its FY26 EPS forecast by 5% and FY27-28 estimates by an average of 3%, attributing the revisions to Domino's cost-out programme

** Both brokerages note stabilising trading conditions, with Citi's updated price target reflecting takeover speculation and reduced concerns over equity raising

** Citi increases DMP price target by 50% to A$19.85, while Morgan Stanley increases price target to A$15.3 from A$14.6

** Stock currently up 9.3% at A$21, on track for its biggest intra-day percentage gain since October 28

** Stock down 29% this year, including the day's move

(Reporting by Roushni Nair in Bengaluru)

((Roushni.Nair@thomsonreuters.com))