Investing.com -- Bank of America downgraded Papa John's International to Underperform from Neutral and cut its price objective to $34 from $42, citing growing uncertainty over the pizza chain's turnaround following the departure of its chief financial officer and intensifying competitive pressures.

The brokerage said the exit of CFO Ravi Thanawala, who is leaving for a role at American Eagle Outfitters after less than three years, raises doubts about the likelihood of a near-term recovery in same-store sales. BofA added that the management change could reduce earnings visibility at a critical stage of the company's turnaround efforts.

The downgrade underscores mounting concerns that Papa John's turnaround is losing momentum as management changes coincide with tougher competition in the U.S. pizza market. Analysts say larger rivals such as Domino's continue to leverage their scale, stronger franchise economics and pricing power, leaving Papa John's with limited room to boost sales or margins amid cautious consumer spending.

BofA also warned that competition in the U.S. pizza market has intensified, with larger rival Domino's benefiting from greater scale, lower operating costs and stronger franchise economics. The firm noted that Papa John's posted negative first-quarter same-store sales growth despite easier comparisons and said the company continues to lag its biggest competitor in customer value and profitability.

Reflecting weaker demand trends, the brokerage lowered its second-quarter North American same-store sales growth forecast to a 6.7% decline from a 6.4% decline previously, while trimming its international growth estimate to 2.5% from 3.5%. It also reduced its 2026 adjusted EBITDA forecast to about $199 million from $204 million, below the company's guidance range of $200 million to $210 million.

BofA also cut its earnings forecasts for 2026 through 2028, citing persistent promotional intensity and macroeconomic headwinds. While Papa John's valuation has fallen to the lower end of its historical range, the brokerage said restaurant sector multiples have compressed broadly, limiting upside potential and making other restaurant stocks more attractive in the near term.