UBS upgraded DPZ to "buy" from "neutral"
Shares of Domino's Pizza, Inc. (NYSE:DPZ) are up 3.3% at $326.99 premarket, following an upgrade from UBS. Though the analyst cut its price target on DPZ to $385 from $430, it raised its rating to "buy" from "neutral," saying the demand for pizza is strong and concerns for demand weakness are overblown. In its note, UBS cites several catalysts for the pizza chain, including "price increases on select promos, efforts to improve driver staffing shortages, and potential third-party delivery partnerships."
The majority of covering brokerages lean pessimistic, as 16 of 22 still rate Domino's pizza stock a "hold" or worse, which means additional bull notes could soon be on the way.
The options pits are similarly bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DPZ sports a 50-day put/call volume ratio of 1.11, which stands higher than 86% of other readings from the past year. In simpler terms, this implies a particular penchant for bearish bets amongst options traders.
Domino's Pizza stock tumbled briefly yesterday, touching a two-year low of $300.63, before the equity went on to bounce and turn in a victory. Today's pop, should it hold, will put the security back above the $320 area that acted as a floor back in May. Coming into today, DPZ was down 43.9% year-to-date.