Papa John’s International (PZZA) may be headed for a major shake-up. Private equity giant Apollo Global Management (APO) has made a $64-per-share offer to acquire the pizza chain, StreetInsider reported. Following the news, PZZA stock jumped nearly 18% on Monday.
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The bid could value the company at around $2 billion. Also, it marks a major move by Apollo to expand its footprint in the quick-service restaurant space.
Apollo has reportedly been granted access to Papa John’s records for due diligence, suggesting a potential deal could be finalized soon if negotiations continue smoothly.
This latest development follows earlier speculation this summer. In June, Semafor had reported that Apollo and a Qatari investment fund were exploring a joint bid to take the company private.
Papa John’s Stock Gains 15% YTD
PZZA stock is up 15% year-to-date, reflecting investor optimism about the company’s growth strategy. While domestic performance has faced pressure from rising costs and intense competition, the company’s international growth, especially in emerging markets such as India and the Middle East, has helped offset some of the headwinds.
Also, Papa John’s is investing in digital tools and tailoring its menu to local tastes to attract more customers and increase sales.
Earlier today, Stephens analyst Jim Salera lowered his price target on Papa John’s stock to $50 from $52, while maintaining a Buy rating. The revision is part of a broader Q3 preview across the Restaurant sector.
Is PZZA Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Papa John’s stock based on three Buys and eight Holds assigned in the past three months. Further, the average PZZA price target of $49.38 per share implies 8.24% upside potential.
