Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Benchmark has raised its price target on Papa John’s (NASDAQ:PZZA) to $60.00 from $50.00 while maintaining a Buy rating following the pizza chain’s second-quarter 2025 results. According to InvestingPro data, the stock currently trades at $42.52, with analysis suggesting the company is currently undervalued despite trading at a relatively high P/E ratio of 19x.
Papa John’s reported its quarterly results on August 7, beating consensus expectations across key metrics. The company posted revenue of $529 million, exceeding analyst projections of $516 million, while North American systemwide same-store sales grew 1%, surpassing expectations by 150 basis points. The company maintains a solid market position with annual revenue of $2.09 billion and EBITDA of $242.24 million over the last twelve months, according to InvestingPro analysis.
Despite the revenue beat, Papa John’s operating income of $25 million aligned with consensus expectations as the company invested an additional $9 million in marketing and advertising during the quarter. Adjusted earnings per share came in at $0.41, $0.07 above consensus, while adjusted EBITDA reached $53 million versus the expected $47 million.
Benchmark’s new price target represents a multiple of 12 times the firm’s fiscal year 2026 adjusted EBITDA estimate of $229 million for Papa John’s. The firm’s decision to maintain its Buy rating reflects its positive view on the company’s performance.
The analyst firm cited "continuing evidence that strategic initiatives and elevated reinvestment in the business are bearing fruit from both a same-store sales and brand messaging standpoint" as key factors supporting its outlook on Papa John’s stock. The company offers an attractive dividend yield of 4.25% and has shown strong momentum with an 8.08% return over the past week. For deeper insights into Papa John’s financial health and growth prospects, investors can access comprehensive analysis through the Pro Research Report available on InvestingPro.
In other recent news, Papa John’s International Inc. reported a strong financial performance for the second quarter of 2025, exceeding analysts’ expectations. The company achieved earnings per share of $0.41, surpassing the anticipated $0.35, and reported revenue of $529.2 million, which was above the expected $515.8 million. This earnings surprise was accompanied by positive domestic same-store sales and international sales that outperformed consensus expectations. Jefferies responded to these results by raising its price target for Papa John’s to $45 from $41, while maintaining a Hold rating. KeyBanc, on the other hand, reiterated its Sector Weight rating, noting that while second-quarter results were strong, domestic sales trends showed signs of softening at the start of the third quarter. Despite this, the overall performance has been viewed positively, with significant attention on the company’s ability to exceed market expectations. These recent developments highlight the company’s current financial health and market position.
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