New management at Domino’s, after an uncertain start, has confounded a number of our concerns. This was best demonstrated by a strong set of interims last month and a positive tenor to justify a near 12% P/E re-rating subsequently. We use this note to formally issue our new 3 year forecasts, which at the EPS level are 2-4% above consensus. Our revised 12m TP is 903p. The shares have had a tremendous run YTD (+32%) and on a FY16 P/E of 26x with 3 year EPS CAGR of 14% it is difficult to justify more than a Hold stance at current highs. The key to the next leg of any outperformance hinges around further positive German newsflow. Specifically German store economics being sufficiently strong for management and franchisees to resurrect unit growth. This would be a clear positive signal in the context of the mid-term growth outlook. We anticipate better clarity around this key issue with the Feb-16 finals.
