Domino’s shares diced and sliced

SHARES in Domino’s Pizza Enterprises have plunged to their lowest level in more than a month after analysts at two investment banks cut their rating on the stock.

Domino’s shares tumbled 9.1 per cent, or $4.92 to $48.92 — a level last seen at the end of May.

The slump came after analysts at Credit Suisse issued a report slicing their target price on Domino’s shares from $42.47 to $36.76.

They cited concerns over a federal parliamentary inquiry into the franchise industry, rising labour costs and questionable growth prospects in Japan and Europe. The joint federal parliamentary committee inquiry into the franchise industry is due to deliver its final report by September 30.

Citi also slashed its rating on the fast food group due to expectations that weakness in Japan will lead to earnings downgrades this financial year.

IG market analyst Kyle Rodda said there was “some pretty aggressive selling going on and we haven’t come close to selling down to the price target set by Citi or Credit Suisse”.