Papa John’s International (PZZA) has received a new Hold rating, initiated by Mizuho Securities analyst, .
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Mizuho Securities has given its Hold rating due to a combination of factors impacting Papa John’s International. The company’s domestic operations are undergoing a turnaround under new CEO Todd Penegor, but this process is still in its early stages, leading to uncertainties about the company’s ability to achieve high single-digit EBITDA growth compared to its peers. The international business has shown signs of stabilization with modest same-store sales growth and unit expansion, yet the domestic market continues to experience volatility, particularly in same-store sales growth, which affects short- and medium-term visibility.
Furthermore, while there is a reported offer from Apollo that suggests a higher valuation, Mizuho Securities believes that a discount is appropriate until there is more clarity on the company’s growth trajectory. The current valuation aligns with the industry average, and the potential for a successful turnaround under private ownership is acknowledged. However, given the current market conditions and the company’s performance, a Hold rating is deemed appropriate until further evidence of sustained growth is observed.
In another report released on October 16, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $57.00 price target.