Barron's Deems Papa John's (PZZA) 'The Tastiest Pizza Stock', But Traders Just Not Hungry
Tweet
Share
E-mail
Get Alerts PZZA Hot Sheet
Join SI Premium – FREE
Barron's believes that Papa John's (NASDAQ: PZZA) is the cream-of-the-crop when it comes to national and international pizza chains. In an article from last night, Barron's said that Papa John's should be an investor's choice when it comes to reliable execution, multiple expansion opportunities, and solid returns.
The other company's in the P3 (three largest pizza chains) include Yum! Brands (NYSE:YUM), which controls the Hut, and Domino's Pizza (NYSE: DPZ). Among these three operators, Barron's points out that shares of PZZA trade at the lowest multiple: 14x trailing earnings, versus 15x at Yum! and more than 15x at Dominos. On an EV/EBITDA basis, Papa John's trades at a multiple of just 7, which compares to 8x for Yum! and 10x for Domino's.
The Barron's piece next argues that Papa John's is "the only one without significant company-specific headwinds. Same store sales at Yum! fell 2% during Q4; Pizza Hut in particular dropped 12%. Then, at Domino's, Barron's believes a change at the helm could be weighing on the stock. The company has also taken a great risk by updating their pizza recipe with better ingredients and a new ad campaign.
Concluding the article, Barron's conducted apparently the most nonscientific taste-test in history -- with plain cheese pizza's to boot! Pitting Papa John's against both Pizza Hut and Domino's pies, the staff decided that Papa John's took the win, but only after being indecisive about the taste of the three. Basically, they said the pizza's tasted the same, though Pizza Hut was markedly worse. They also griped that none were on equal footing to any pizza parlor in NYC.
When it comes to delivering profits to your portfolio, buy a New York pizza parlor. If you can't swing that, then Papa John's seems to be structured the best in a recovering economy.
Despite the bullish article, shares of Papa John's are down about 3% today.
The other company's in the P3 (three largest pizza chains) include Yum! Brands (NYSE:YUM), which controls the Hut, and Domino's Pizza (NYSE: DPZ). Among these three operators, Barron's points out that shares of PZZA trade at the lowest multiple: 14x trailing earnings, versus 15x at Yum! and more than 15x at Dominos. On an EV/EBITDA basis, Papa John's trades at a multiple of just 7, which compares to 8x for Yum! and 10x for Domino's.
The Barron's piece next argues that Papa John's is "the only one without significant company-specific headwinds. Same store sales at Yum! fell 2% during Q4; Pizza Hut in particular dropped 12%. Then, at Domino's, Barron's believes a change at the helm could be weighing on the stock. The company has also taken a great risk by updating their pizza recipe with better ingredients and a new ad campaign.
Concluding the article, Barron's conducted apparently the most nonscientific taste-test in history -- with plain cheese pizza's to boot! Pitting Papa John's against both Pizza Hut and Domino's pies, the staff decided that Papa John's took the win, but only after being indecisive about the taste of the three. Basically, they said the pizza's tasted the same, though Pizza Hut was markedly worse. They also griped that none were on equal footing to any pizza parlor in NYC.
When it comes to delivering profits to your portfolio, buy a New York pizza parlor. If you can't swing that, then Papa John's seems to be structured the best in a recovering economy.
Despite the bullish article, shares of Papa John's are down about 3% today.
You May Also Be Interested In
- Tesla Nears Unveiling of Radical New ‘Flying’ Roadster - The Information
- Kenon Holdings (KEN) halted, news pending
- Planet Green halted again, now up 793%
Create E-mail Alert Related Categories
Insiders' Blog, Trader TalkRelated Entities
Barron'sSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
