DMP -18.4%: The pizza maker got hit today after sighting inflationary pressures across the group along with weaker sales in their Japanese operation at their AGM today. Citi say that Domino’s cost pressures appear to be building due to the early onset of food cost inflation and the two-week closure of the highly profitable New Zealand market, and that puts their FY earnings at risk. When your stock is trading at a ~90% premium to the broader industrial sector, any sort of hiccup will be compounded by a big multiple re-rate. If we price DMP back on it’s average P/E for the past 5 years, i.e. take away the COVID bump to earnings and multiple expansion, DMP is worth ~$90, not the $116 it closed today.
MM has no interest in DMP at this stage
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