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Bank of America says Domino's Pizza is a tech play. Here's why

An employee takes a customer's order on the phone at a Domino's Pizza restaurant.
Daniel Acker | Bloomberg | Getty Images

Bank of America Merrill Lynch upgraded Domino's Pizza shares to buy from underperform and raised its price target on the restaurant chain by $55, citing the prospect of market share gains due to the company's technological prowess.

"We believe that digital ordering and technology advantages, best in class cash-on-cash returns, and its simple menu offering that allows efficient in-store execution will continue to drive sales growth," analyst Gregory Francfort wrote in a note to clients Friday.

"We believe that DPZ can continue to gain substantial market share and sustain its strong growth record at a faster pace than what is implied in its current stock price."

Domino's Pizza is scheduled to announce third-quarter financial results on Tuesday. Its shares are up 35 percent this year as of Thursday's close.

"While we think the [third] quarter will be fine, this upgrade is not a call on the quarter. We expect momentum to continue with 10.4% domestic same store sales," he added.