Broker snap: Panmure delivers Domino's downgrade

28th Sep 2011 13:05

Peel Hunt has lowered its recommendation on Domino's Pizza to "hold" from "buy" on valuation grounds, despite a strong trading update from the pizza deliverer. Domino's Pizza posted like-for-like sales growth of 3.9%, up from 2.4% in the first half. "We see the stock as a core leisure holding with significant further growth in the UK and an exciting opportunity in Germany," the broker said. "However, the market has already responded with a 32% share price rise in the last three months."It notes that the shares trade on about 27.1 times earnings, which it sees as "close to fair value."It lifts its target price on Domino's to 510p from 500p.