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DPZ, a 5% higher target price
Current 530 Target 558 +5%
December 22nd 2021
1 minute read
Sales a bit weak, declined -3%
Cash costs up 1 point, profit up on lower non cash costs
Cashflow higher on working capital
Balance sheet higher leverage
Valuation, a 5% higher target price
1 minute read
Sales a bit weak, declined -3%
- Sales declined -3% in the third quarter to 998 million dollars vs our 1,074 million dollars forecast.
- This brings the quarterly average to 4% growth.
- We predict average growth of 5% in this next 12 months to bring sales to 1,143 million dollars in the third quarter of 2022.
Cash costs up 1 point, profit up on lower non cash costs
- The cash cost ratio went from -86% to -87% profit from 116 to 121 million dollars in the third quarter on lower non cash costs.
- The average cost ratio is at -86% now.
- We use the average -86% cost ratio to predict a higher 146 million dollars profit in the third quarter of 2022.
Cashflow higher on working capital
- Free cashflow went from 126 to 172 million dollars in the third quarter with positive working capital & -18 million dollars investment Cashflow.
- Average quarterly Cashflow is at 155 million dollars now.
- We assume the same -18 million dollars investment spending which with higher sales gives a 141 million dollars Cashflow in the third quarter of 2022.
Balance sheet higher leverage
- Cash increased 292 to 295 million dollars in the third quarter.
- Liabilities increased 5,862 to 5,892 million dollars so net cash worsened -5,570 to -5,597 million dollars.
- With our forecast cashflow & a -15,739 million dollars equity payout -280 million dollars liabilities payment net cash will be -5,317 million dollars in 12 months time.
Valuation, a 5% higher target price
- DPZ capital from the last 27 quarters improved 1,747 to 1,874 million dollars in the third quarter & will be 617 million dollars in12 months time.
- At the current market value of 19,270 million dollars based on our forecasts it’s at 10.8 X assets with a 3 years payback & a 2% yield.
- Our cashflow forecast is 580 million dollars which means an 33 X valuation. A 35 X valuation gives a 5% higher target price of 558 dollars.