Papa John's To See Sustainable International Net Unit Growth In 2025, Analyst Highlights 'Strategic Closures'
Portfolio Pulse from Nabaparna Bhattacharya
Piper Sandler analyst Brian Mullan maintained a Neutral rating on Papa John's International, Inc. (PZZA) with a $67 price target. The company's 'Back to Better 2.0' initiative changes franchisee marketing contributions, increasing national marketing funds to 6% and eliminating mandatory local marketing, potentially benefiting franchisee P&Ls by 200 bps. In the U.K., franchisee consolidation has led to improved sales trends. The company is also considering strategic store closures internationally to prepare for sustainable growth in 2025 and beyond. The analyst forecasts FY24E EPS of $2.68 and revenues of $2.211 billion. PZZA shares closed at $71.89, down 0.44% on Friday.
January 12, 2024 | 9:09 pm
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Piper Sandler analyst Brian Mullan reiterates a Neutral rating on Papa John's with a $67 price target. The company's new marketing strategy and potential international store closures are aimed at improving profitability and setting up for growth in 2025.
The Neutral rating suggests that the analyst sees no immediate strong positive or negative impact on the stock. The strategic changes in marketing and store operations are seen as a long-term growth strategy, which may not significantly affect the short-term stock price. The forecasted EPS and revenues indicate stability, but the current share price is above the analyst's target, which could imply limited upside potential in the short term.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 100