Domino's Pizza (DPZ) faces a softer Q4 outlook as broader restaurant demand weakens, though the chain remains relatively well positioned, RBC Capital Markets said in a Tuesday note.
The report said US Q3 same-store sales came in 99 basis points ahead of consensus where value offerings appeared to resonate with consumers, contributing to franchisee profitability.
But broader US restaurant spending was softer in September and October, weighing on Q4 outlook, the report added.
RBC analysts said they viewed the current risk/reward as
appropriately balanced following its recent outperformance against the broader RBC Restaurants coverage group.
RBC cut its price target on Domino's to $450 from $500 while keeping its sector perform rating.
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