Morgans said it had lowered its earnings estimate by almost 5 per cent to 211 cents, but said there was “meaningful upside” to the current share price over the next year.

Shares in Domino’s boomed during the pandemic as more people used its delivering services during restrictions and lockdowns. it reached $164. 98 in September but was now around $81.

Morgans senior analyst and co-head of research Alexander Mees said the reduction in its earnings estimate was because of inflation and a more cautious view of the company’s growth in the Japanese market.

“Shares in Domino’s have been under pressure since the company warned of slower growth in Japan in late 2021. This pressure was compounded by a first half result in February that disappointed on margins, notably in Japan were the extent of rebasing of profitability following the post-lockdown decline is sales took the market by surprise,” Mees said in a note to investors.

But he said demand was likely to remain resilient in times of inflation and slower economic growth and historically takeaway food was one of the best performing categories of consumer spending during periods of higher inflation.

Domino’s also expected to roll out 500 more stores in 2022.

“Same store sales growth is also likely to nomalise to the three-to-five year target range of 3 per cent to 6 per cent in 2023,” Mees said.

He added the company had also developed a solid platform of inorganic growth and had the capacity for more mergers and acquisitions.