Papa John's (PZZA) Stock Pushed Higher by Analyst Upgrade
NEW YORK (TheStreet) -- Papa John's International (PZZA) - Get Report shares are advancing 0.13% to $57.65 on Monday after analysts at KeyBanc CapitalMarkets this morning lifted their rating on the restaurant chain to "overweight" from "sector weight" with a $70 price target.
"We believe the long-term growth fundamentals are intact," analysts said.
Looking ahead, the company can double its earnings in four to five years.
Some factors that may boost its future profits include repurchasing stock and an expanding international segment, according to the firm's note.
Based in Louisville, KY, Papa John's operates and franchises pizza delivery and carryout restaurants under the trademark Papa John's in the U.S. and internationally.
Separately, TheStreet Ratings team rates PAPA JOHNS INTERNATIONAL INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate PAPA JOHNS INTERNATIONAL INC (PZZA) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PAPA JOHNS INTERNATIONAL INC has improved earnings per share by 15.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PAPA JOHNS INTERNATIONAL INC increased its bottom line by earning $1.76 versus $1.55 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $1.76).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Hotels, Restaurants & Leisure industry average. The net income increased by 11.8% when compared to the same quarter one year prior, going from $16.08 million to $17.97 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, PAPA JOHNS INTERNATIONAL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $41.76 million or 37.98% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.72%.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: PZZA