Papa John's International Has Got All The Drivers In Place For A Solid '24, Says Analyst
Portfolio Pulse from Shivani Kumaresan
Wedbush analyst Nick Setyan has maintained an Outperform rating on Papa John's International Inc (PZZA) and increased the price target from $85 to $87. The Q4 FY23 North America same-store sales growth exceeded expectations, and franchisees will contribute more to the national marketing fund starting Q2 2024. The analyst expects 2024 same-store sales growth to be driven by transactions and sees potential for increased franchised unit growth. International margins should improve despite the Middle East conflict affecting near-term visibility. Operating margins and EPS estimates for FY24 have been raised, with the new price target based on a 15.4x EV/EBITDA multiple.
January 11, 2024 | 7:46 pm
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Wedbush analyst Nick Setyan reiterates Outperform rating on Papa John's, raises PT from $85 to $87, citing Q4 sales growth, increased marketing contributions, and a positive outlook for 2024 with expected transaction-driven SSS growth and improved operating margins.
The analyst's reiteration of an Outperform rating and an increased price target suggests a positive outlook for Papa John's stock. The better-than-expected Q4 sales performance and the strategic moves to increase marketing contributions and close unprofitable units are likely to be viewed positively by investors. The raised operating margin and EPS estimates for FY24 further support the potential for stock price appreciation in the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100