KeyBanc reiterates Sector Weight rating on Papa John’s stock after 2Q25 beat

Published 08/08/2025, 13:36
KeyBanc reiterates Sector Weight rating on Papa John’s stock after 2Q25 beat

Investing.com - KeyBanc has reiterated its Sector Weight rating on Papa John’s (NASDAQ:PZZA), a $1.4 billion market cap pizza chain with annual revenue of $2.06 billion, following the company’s second-quarter 2025 results, which exceeded expectations for earnings per share and same-store sales growth.

The pizza chain reported stronger-than-expected domestic and international same-store sales growth in the second quarter, though KeyBanc noted that domestic sales trends softened at the beginning of the third quarter. According to InvestingPro data, Papa John’s maintains a healthy 20.1% gross profit margin despite challenging market conditions.

Papa John’s management expects growth to improve as the third quarter progresses and anticipates further acceleration in the fourth quarter as new innovations are introduced, according to KeyBanc’s analysis.

The company reaffirmed its full-year EBITDA range and North American same-store sales growth outlook, while raising its forecast for international same-store sales growth.

KeyBanc raised its 2025 and 2026 earnings per share estimates to reflect the second-quarter performance and slightly higher same-store sales growth expected in the fourth quarter, but maintained its Sector Weight rating, noting that the stock’s current valuation at 19x 2026 estimated earnings is "close to fair value."

In other recent news, Papa John’s International Inc. reported strong financial results for the second quarter of 2025, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $0.41, surpassing the anticipated $0.35, which marks a 17.14% earnings surprise. Revenue reached $529.2 million, outpacing the expected $515.8 million. Jefferies responded to these results by raising its price target for Papa John’s from $41.00 to $45.00, while maintaining a Hold rating on the stock. The pizza chain’s domestic same-store sales showed positive growth, and international sales exceeded consensus expectations, registering a 3.7% increase compared to the anticipated 1.3%. These developments reflect a robust performance for the company in the latest quarter.

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