Jefferies Remains Sidelined on Papa John's (PZZA) as Lower Costs Drive EPS Upside
Jefferies reiterated a Hold rating on Papa John's (NASDAQ: PZZA), and cut the price target to $58.00 (from $64.00), following the company's 4Q earnings report. EPS came in at $0.62, beating the consensus of $0.57, as lower commodity costs and reduced auto insurance expenses drove upside. '16 EPS guide of $2.30-2.40 on 2-4% domestic SSS and 5-7% international SSS is inline with consensus.
Analyst Alexander Slagle commented, "While the stock is up meaningfully following the 4Q release, we think expectations were fairly low heading into the print, with concerns that SSS would miss and remain under pressure into '16. Guide for US & Intl SSS of 2-4% & 5-7%, respectively, matches last year's initial outlook, implying that underlying trends remain reasonably stable & management has a high level of confidence in its ability to navigate the more intense competitive environment in QSR."
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Shares of Papa John\'s closed at $59.60 yesterday.