11:37 AM EDT, 10/11/2024 (MT Newswires) -- Domino's Pizza's (DPZ) Q3 results were "mixed" and the "lighter" 2025 view may be a "de-risking event" that could be deemed conservative, Morgan Stanley said in a note to clients Friday.

On Thursday, the company reported Q3 earnings of $4.19 per share, up from $4.18 a year earlier. Revenue for the quarter was $1.08 billion, up from $1.03 billion a year earlier.

The company's US segment was not falling below expectations, while the International segment was "more the driver of slower top line outlook."

The assessment of a "mixed" Q3 will probably still apply post-earnings call, the analysts said, as the stock response was "more muted" than usual. "Against relatively tempered expectations, the lighter view of [2025] may be a bit of a de-risking event, and could in some ways be conservative," the analysts said.

Key issues include a slowing US performance, with Q4 expected to decline further, raising questions about a rebound in 2025 and the impact of third-party delivery, Morgan Stanley said. Meanwhile, lower international guidance raises concerns about whether the downturn is temporary or a new normal for US brands.

Morgan Stanley has lowered the company's Q4 domestic same-store sales outlook to 2% from 3%, while International same-store sales outlook is down to 1.8% from 3.5% due to ongoing pressures in Asia, Europe and the Middle East.

For 2025, US and International same-store sales projections have been revised to 3.8% and 1.9%, respectively, down from 4.1% and 3.5%, the note said.

Morgan Stanley adjusted its price target to $510 from $520, while maintaining an overweight rating on the stock.

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