The pizza wars pit the two main pizza franchises in opposition to one another: Domino’s Pizza Inc. NYSE: DPZ versus Papa John’s Worldwide Inc. NASDAQ: PZZA. Whereas each manufacturers function within the retail/wholesale sector and have their followers and critics, one inventory is clearly profitable this conflict: Domino’s.

Market Divergence: Domino’s Surges Whereas Papa John’s Struggles

In reality, the trajectory between the two shares could not be any extra reverse. Domino’s inventory is buying and selling up 26.5% year-to-date (YTD), whereas Papa John’s is buying and selling down practically 39% YTD close to 52-week lows when the S&P 500 index is buying and selling close to all-time highs.

With such a divergence, buyers query whether or not it should proceed and which inventory presents a greater funding alternative transferring ahead. Let’s look at every inventory.

Domino’s: The World’s Largest Pizza Firm

Domino’s is the world’s largest pizza firm, working in over 90 worldwide markets serviced by over 20,500 eating places. Over 95% of its shops are franchised, which makes Domino’s an asset-light operation. The corporate caters to budget-conscious shoppers, providing quite a few promotions, coupons, and a loyalty program accessible by way of its cell app. The corporate is extremely technology-oriented, with heavy investments within the cell app, on-line ordering, and supply monitoring.

Domino’s Q1 2024 EPS Beats Estimates

On April 24, 2024, Domino’s reported Q1 2024 EPS of $3.58, beating analyst estimates by 18 cents. Revenues grew 5.9% YoY to $1.08 billion, matching consensus estimates. World retail gross sales grew 7.3% YoY. U.S. same-store gross sales (SSS) grew 5.6% YoY. Worldwide gross sales rose 0.9%. World web retailer development was 164. Its latest partnership with Uber Applied sciences Inc. NYSE: UBER Uber Eats partnership will end in an additional 3% extra gross sales by way of the channel.

Domino’s Reaffirms Robust 2024 Forecasts

Domino’s expects 7% annual international retail gross sales development and eight% annual earnings development from operations. The corporate expects to develop its retailer depend by over 1,100 in 2024. U.S. comps are anticipated to remain above 3% every quarter. Uber Eats gross sales are anticipated to extend all year long as advertising spend and consciousness rise.

Domino’s CEO Russell Weiner commented, “The famend worth we created by way of our new and improved Domino’s Rewards loyalty program drove outsized comp efficiency, which flowed by way of to the underside line with double-digit revenue development. Importantly, our development within the U.S. got here by way of constructive order counts in each our carryout and supply companies for the second quarter in a row. Additional, this order development was throughout all earnings cohorts.”

DPZ Inventory Continues its Day by day Ascending Channel

The day by day candlestick chart on DPZ shows an ascending channel comprised of upper highs and better lows. Shares are buying and selling close to the decrease trendline because the day by day RSI falls to the 55-band. Pullback assist ranges are at $500.82, $469.17, $440.37, and $416.36.

Domino’s Pizza analyst rankings and value targets are on MarketBeat.    

Papa John’s: Navigating Restoration and Development Challenges

Papa John’s is the fourth-largest pizza operator within the nation. It’s nonetheless recovering from the various controversies surrounding its founder, John Schnatter, starting from racial slurs and political feedback to sexual harassment allegations and the poison tablet adopted by the Board of Administrators to forestall Schnatter from ever regaining management of the corporate. Roughly 91% of its U.S. shops and round 41% of its worldwide shops are franchised. Papa John’s focuses on contemporary and premium components. The inventory is buying and selling close to its 52-week lows.

Papa John’s Revenues Proceed to Fall in Q1 2024

Papa John’s reported Q1 2024 EPS of 67 cents, beating analyst estimates by 10 cents. Revenues fell 2.5% YoY to $513.9 million, lacking the consensus estimates of $544.46 million. North American comparable gross sales fell 2% YoY. Home company-owned restaurant gross sales fell 3% YoY. North American franchised restaurant gross sales fell by 2%. Worldwide comparable gross sales fell 3% YoY. The variety of new items in North America rose by 8, and the corporate expects to open 100 to 140 new eating places in 2024. Papa John’s expects North American comps to stay flat to down low single digits within the full 12 months 2024.

PZZA Inventory is in a Descending Triangle Breakdown Sample

The day by day candlestick chart on PZZA illustrates a bearish descending triangle sample. The descending triangle shaped on the decrease highs that shaped following the $64.67 peak right down to the flat-bottom decrease trendline assist at $46.68. The day by day RSI is falling again to the 30-band, indicating a possible breakdown. Pullback assist ranges are at $46.22, $41.60, $38.29, and $31.50.

Papa John’s analyst rankings and value targets are on MarketBeat.

Earlier than you take into account Domino’s Pizza, you will wish to hear this.

Whereas Domino’s Pizza at the moment has a “Reasonable Purchase” ranking amongst analysts, top-rated analysts imagine these 5 shares are higher buys.

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