Credit Suisse found no surprises in the update. The main unknown is the willingness of franchisees to invest, as opening of new stores is the primary determinant of the company’s earnings growth.
Credit Suisse downgrades earnings estimates for FY20, to mainly reflect additional costs related to the pandemic. There was not enough in the update to shift investor sentiment and the broker retains an Underperform rating.
Whether the acceleration in delivery stemming from the pandemic is sustained is considered uncertain. Target is reduced to $51.86 from $53.21.
Sector: Consumer Services.
Target price is $51.86.Current Price is $64.00. Difference: ($12.14) – (brackets indicate current price is over target). If DMP meets the Credit Suisse target it will return approximately -23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
