BofA Securities Downgrades Papa John\'s (PZZA) to Underperform, 'Management turnover increases NT uncertainty'
BofA Securities analyst Sara Senatore downgraded Papa John\'s (NASDAQ: PZZA) from Neutral to Underperform with a price target of $34.00 (from $42.00).
The analyst comments "We lower our PO to $34 (vs $42 prior) as we apply the current 1.0x multiple (prior 1.1x) relative to an equal weighted S&P (implies 21.2x absolute vs 22.4 prior) to our forward EPS estimate (2Q27-1Q28: $1.61). While PZZA’s multiple sits at the low end of its historical range, multiples have compressed across LSR. Notably, YUM’s recent sale of Pizza Hut (we estimate ~4-5x EBITDA for PH ex China) also suggests limited upside to PZZA’s multiple (~9x EBITDA). PZZA’s domestic business is healthier than PH’s, but its int’l business is smaller and less well established. We see more NT upside elsewhere."
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Shares of Papa John\'s closed at $33.49 yesterday.