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Tuesday, Loop Capital maintained its Buy rating on Papa John's (NASDAQ:PZZA) shares but reduced the price target from $73.00 to $60.00.
The adjustment follows Papa John's preliminary report of a slight shortfall in North America comparable store sales for the fourth quarter, prior to its presentation at the ICR conference last week.
Papa John's disclosed that same-store sales in North America decreased by 4% in the fourth quarter, with a 6% drop in company-owned stores and a 4% decline in franchised locations.
These figures did not meet Loop Capital's previous forecast of a 3.5% decrease for franchised stores and were below the consensus estimate of a 3.7% decline.
The results were also not aligned with the 2.5-3.0% decline range suggested by the firm's checks up to the third week of November 2024.
International same-store sales also saw a 2% decrease in the fourth quarter, which was slightly better than Loop Capital's prediction of a 2.5% fall but worse than the consensus estimate of a 2.0% drop.
Despite these setbacks, Papa John's announced the opening of 122 net new restaurants during the fourth quarter of 2024, including 60 in North America and 62 internationally.
The revised price target of $60.00 is based on approximately 11 times Loop Capital's updated 2025 enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization) estimate for Papa John's.
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