Broker snap: Domino's CEO exit creates 'further uncertainty', says N+1 Singer

6th Dec 2013 11:30

N+1 Singer Equity Research has maintained a 'hold' rating and 550p target price for pizza delivery group Domino's, saying that the resignation of Chief Executive Lance Batchelor creates "further uncertainty".Domino's announced on Friday that Batchelor is to stay with the group until the end of April 2014, at which time he will join an undisclosed private equity backed company in a non-competing sector."Further senior management change so shortly after news of the Finance Director leaving is not good news for market sentiment," said analyst Sahill Shan."Given some valid question marks over the pace of UK expansion possibly slowing down, and what that effect may have on operational gearing going forward, coupled with Germany related issues, today's news just creates further uncertainty."Shan said that with the stock trading at 19.4 times earnings, it is "susceptible to any negative news".The analyst said that a de-rating towards a price-to-earnings multiple of 17.5 on 4% lowered forecasts would imply fair value of around 460p.The stock was down 5.2% at 501.5p in morning trade.BC