24/7 Wall St.
(24/7 Wall St.)
Quick Read
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Berkshire Hathaway (BRK-B) disclosed a position in Domino’s Pizza (DPZ), down 14% to $402.70 with $671.5M free cash flow up 31%. Chipotle Mexican Grill (CMG) is down 31% to $37 with $1.4B Q4 free cash flow.
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Berkshire’s Domino’s position reflected appetite for franchise-heavy, cash-generating restaurants. Chipotle fits the same profile with strong free cash flow despite recent sales weakness.
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Warren Buffett made a quiet but telling move when Berkshire Hathaway (NYSE:BRK-B) disclosed a position in Domino’s Pizza (NASDAQ:DPZ) in late 2024. The logic was pure Buffett: a franchise-heavy, cash-generating machine with pricing power and a loyal customer base. Since that purchase, the stock has had a bumpy ride. But with Greg Abel set to take the reins at Berkshire, the question worth asking is what restaurant stock his successor might reach for next.
How Domino’s Has Performed
Domino’s isn’t exactly lighting up the scoreboard lately. The stock is down about 14% over the past year, sitting at $402.70 against a 52-week high of $493.25. That said, the underlying business tells a different story.
In Q4 2025, Domino’s posted U.S. same-store sales growth of 3.7% and opened 392 net new stores globally, bringing its total footprint to 22,142 locations. Free cash flow surged 31% for the full year to $671.5 million. The board also approved a 15% quarterly dividend increase to $1.99 per share.
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CEO Russell Weiner put it plainly on the earnings call: “In 2025 we demonstrated that when we execute our Hungry for MORE strategy it delivers MORE sales, MORE stores, and MORE profits.” That’s the kind of capital-light, franchise-driven compounding that Berkshire has always loved. Think of Domino’s like a toll bridge — franchisees pay to use the brand and supply chain, and Domino’s collects royalties whether the economy is booming or struggling.
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What Greg Abel Might Buy Next
The most logical candidate for Abel’s first restaurant move is Chipotle Mexican Grill (NYSE:CMG). The stock is down nearly 31% over the past year, trading around $37 — well off its 52-week high of $58.42. Berkshire has historically shown interest in fundamentally strong businesses during periods of price weakness.
Chipotle generated $1.4 billion in free cash flow in Q4 2025 alone and plans to open 350 to 370 new restaurants in 2026. It carries a clean balance sheet with $2.8 billion in shareholders’ equity — a stark contrast to Domino’s leveraged structure. The forward P/E sits around 31x, which is not cheap by Buffett standards, but Abel has signaled a willingness to pay up for quality.
The risk is real: Chipotle saw comparable restaurant sales decline 2.5% in Q4 2025, and labor cost inflation continues to pressure margins. Transaction counts would need to stabilize before analysts could call a bottom.
Domino’s showed Berkshire still has an appetite for restaurants when the price and business model are right. Chipotle, battered by a rough year but backed by durable brand strength and serious cash generation, fits the profile of businesses Berkshire has historically favored – though whether Abel would move on it remains purely speculative. Whether it actually happens depends on price discipline — and that’s one thing Berkshire has never lacked.
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