What Happened?
Shares of fast-food pizza chain Papa John’s (NASDAQ: PZZA) fell 2.4% in the afternoon session after BofA Securities downgraded the stock's rating to 'Neutral' from 'Buy' and lowered its price target.
The analyst firm reduced its price projection for the company's shares to $50.00 from a previous target of $62.00, a significant drop of about 19.35%. This adjustment from B of A Securities analyst Sara Senatore suggested a new perspective on the company's market performance. The downgrade and price target cut reflected a reassessment of the company's valuation and its future potential within the market, which influenced investor sentiment.
The shares closed the day at $46.57, down 1.6% from previous close.
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What Is The Market Telling Us
Papa John’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 15.3% on the news that the company reported decent first quarter 2025 results which included a narrow beat on same-store sales and full-year EBITDA guidance that slightly exceeded Wall Street's expectations, although EBITDA slightly missed.
Sales rose just 1% from last year, with more money coming in from its food supply and ad units. This helped balance out the drop from weaker sales at company-run stores, especially in the U.K., where many shops closed or were sold. Overall, this print had some key positives.
Papa John's is up 7.6% since the beginning of the year, but at $46.57 per share, it is still trading 20% below its 52-week high of $58.21 from November 2024. Investors who bought $1,000 worth of Papa John’s shares 5 years ago would now be looking at an investment worth $565.44.
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