Papa John's falls after Keybanc downgrades to 'sector weight'
14/11/2024 14:58
(Updates)
** Shares of Papa John's International PZZA.O fall 3.6% to
$48.96 in early trade
** Keybanc downgrades stock to "sector weight" from
"overweight"; says road to sales and profit recovery in the
domestic business could be longer and windier than previously
expected
** Says Q4 is shaping up to be another difficult period,
despite the modest improvement in recent same-store sales trends
due to industry improvement and advertising investments
** Brokerage says advertising efforts are to find the right
balance between innovation and value, without chasing
competitors' price points
** Notes that fixing PZZA may also require additional
co-investment, and a partial unwind of its "Back to Better 2.0"
strategy, which reduced franchisee advertising fund
contributions and is slated to increase commissary rates over
four years
** Nine of 18 brokerages rate the stock "buy" or higher and
nine "hold"; with a median PT of $61.61 - data compiled by LSEG
** Up to Wednesday's close, stock down ~33% YTD
(Reporting by Neil J Kanatt in Bengaluru)
((Neil.JKanatt@thomsonreuters.com;))