Panmure Liberum has retained its 'buy' rating on Domino's Pizza Group PLC (LSE:DOM) and set a 300p target price, saying a recovery in order growth and supply-chain efficiency could drive stronger cash flow from 2027.

The broker said Domino's has spent several years expanding stores, digital capability and supply-chain capacity faster than orders grew, reducing orders per store and weakening profit conversion.

Its recovery plan centres on four growth levers: CHICK 'N' DIP, loyalty, aggregators and product innovation, alongside automation aimed at reducing labour, handling and delivery costs.

Panmure Liberum expects these measures to increase order volumes through the existing network while improving operating leverage as implementation costs fall away.

The broker said order growth is more important than price-led growth because additional orders improve production, warehouse utilisation, delivery density and royalty income simultaneously.

It expects group EBITDA drop-through to rise from about 13% in 2026 to the mid-20s in 2027 and 2028, while free cash flow should recover as capital expenditure normalises.

The report forecasts free cash flow after capital expenditure rising from £51.5 million in 2026 to £65.2 million in 2027 and £74.7 million in 2028.

Panmure Liberum said the supply chain is the main earnings swing factor, with 14 productivity projects planned through 2028 and seven expected to be completed in 2026.

The programme targets about 280,000 labour hours of annual savings by 2028, which the broker estimates could add £3 million to £4 million to EBITDA.

The broker also highlighted risks, including weak structural order growth, loyalty and aggregator costs, automation savings being offset by wages, and the £200 million debt refinancing due in July 2027.

It said the shares trade at about 11 times forecast 2027 earnings and offer a dividend yield of about 6%, while its 300p target is based on a blend of discounted cash flow, return on capital and peer valuations for the shares.