Zacks Investment Research lowered shares of Papa John’s International, Inc. (NASDAQ:PZZA) from a hold rating to a strong sell rating in a report released on Monday, November 6th.
According to Zacks, “Papa John’s third-quarter 2017 earnings of 60 cents per share topped the Zacks Consensus Estimate by 1.7% and were up 5.3% year over year (y/y) owing to higher revenues and lower costs. Revenues of $431.7 million came above the consensus mark by 1.2% and increased 2.2% y/y. In addition to product innovation, the company is focusing on digital enhancements and brand imaging. Papa John’s large scale expansion plans and increased focus on franchising bode well too. However, management stated that the decline in viewership of the NFL, combined with significant negative consumer sentiment of its association with the league, might continue to hamper comps growth. Moreover, costs related to sales initiatives coupled with forex headwinds could weigh on profits while a choppy sales environment in the restaurant space may limit revenue growth. Also, shares of the company have underperformed the industry in the last year.”
A number of other brokerages have also commented on PZZA. BTIG Research reissued a buy rating and issued a $90.00 price objective (down previously from $100.00) on shares of Papa John’s International in a research report on Tuesday, October 24th. Stephens cut their price objective on shares of Papa John’s International from $95.00 to $85.00 and set an overweight rating on the stock in a research report on Wednesday, October 11th. Jefferies Group LLC reissued a hold rating and issued a $83.00 price objective on shares of Papa John’s International in a research report on Friday, July 14th. TheStreet lowered shares of Papa John’s International from a b rating to a c+ rating in a research report on Tuesday, October 31st. Finally, Citigroup Inc. initiated coverage on shares of Papa John’s International in a research report on Monday, September 18th. They set a buy rating and a $90.00 price target on the stock. Two analysts have rated the stock with a sell rating, six have assigned a hold rating and three have assigned a buy rating to the stock. The stock has an average rating of Hold and an average target price of $79.56.
Papa John’s International (NASDAQ:PZZA) last released its quarterly earnings results on Tuesday, October 31st. The company reported $0.60 earnings per share for the quarter, missing the Thomson Reuters’ consensus estimate of $0.61 by ($0.01). The company had revenue of $431.70 million during the quarter, compared to analyst estimates of $427.23 million. Papa John’s International had a net margin of 6.12% and a return on equity of 4,321.08%. The firm’s quarterly revenue was up 2.2% compared to the same quarter last year. During the same quarter last year, the company earned $0.57 EPS. sell-side analysts expect that Papa John’s International will post 2.76 EPS for the current fiscal year.
The business also recently announced a quarterly dividend, which was paid on Friday, November 17th. Stockholders of record on Tuesday, November 7th were issued a $0.225 dividend. The ex-dividend date of this dividend was Monday, November 6th. This represents a $0.90 dividend on an annualized basis and a dividend yield of 1.60%. Papa John’s International’s dividend payout ratio (DPR) is currently 31.03%.
Papa John’s International declared that its board has approved a share repurchase program on Tuesday, August 1st that authorizes the company to repurchase $500.00 million in shares. This repurchase authorization authorizes the company to reacquire up to 198% of its shares through open market purchases. Shares repurchase programs are usually a sign that the company’s management believes its shares are undervalued.
In other news, Director Wayne Kent Taylor purchased 8,860 shares of the stock in a transaction on Thursday, November 9th. The stock was purchased at an average price of $57.53 per share, for a total transaction of $509,715.80. Following the acquisition, the director now owns 30,822 shares in the company, valued at $1,773,189.66. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, SVP Timothy C. Ohern sold 9,218 shares of the firm’s stock in a transaction that occurred on Thursday, August 31st. The stock was sold at an average price of $75.08, for a total transaction of $692,087.44. Following the sale, the senior vice president now directly owns 35,650 shares of the company’s stock, valued at approximately $2,676,602. The disclosure for this sale can be found here. 27.70% of the stock is currently owned by corporate insiders.
Hedge funds have recently made changes to their positions in the company. Flinton Capital Management LLC grew its position in Papa John’s International by 76.9% in the 2nd quarter. Flinton Capital Management LLC now owns 1,840 shares of the company’s stock valued at $132,000 after purchasing an additional 800 shares during the period. Oppenheimer Asset Management Inc. acquired a new stake in Papa John’s International in the 3rd quarter valued at $152,000. Victory Capital Management Inc. grew its position in Papa John’s International by 17.6% in the 2nd quarter. Victory Capital Management Inc. now owns 2,574 shares of the company’s stock valued at $185,000 after purchasing an additional 386 shares during the period. Trexquant Investment LP acquired a new stake in Papa John’s International in the 2nd quarter valued at $201,000. Finally, Riverhead Capital Management LLC grew its position in Papa John’s International by 87.3% in the 2nd quarter. Riverhead Capital Management LLC now owns 2,996 shares of the company’s stock valued at $215,000 after purchasing an additional 1,396 shares during the period. 85.30% of the stock is owned by institutional investors.
About Papa John’s International
Papa John’s International, Inc (Papa John’s) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark Papa John’s. The Company operates through five segments: domestic Company-owned restaurants, North America commissaries, North America franchising, international operations and all other business units.
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