Broker snap: Panmure Gordon reiterates sell on Dominos

3rd Jan 2012 11:04

Analysts at Panmure Gordon are today reiterating their sell verdict on shares of Domino´s Pizza. This ahead of the company´s interim management statement expected out tomorrow. In particular, the broker believes that the company´s rate of sales growth will be weighed upon by "relatively tough comps and mild weather." Hence, it expects the company to report 3.3% like-for-like sales growth for Q4, below the 3.9% rate seen in Q3. As well, Panmure Gordon highlights how, "the stock now trades at 24,1 times its 2011 price/earnings ratio and at a Enterprise Value/EBITDA (operating profits) multiple of 14.1, supported by a 3.0% yield. For a stock we forecast to grow earnings by approximately 11% in 2012 we view this as too expensive. We reiterate our sell recommendation and target price of 350p."As of 12:36PM shares of Domino´s Pizza are moving up by 0.7% to the 405.5p mark. AB