Papa John’s Experiences Surge in Options Trading Amid Earnings Report

Papa John’s International, Inc. (NASDAQ:PZZA) witnessed an extraordinary spike in options trading on Friday, with investors acquiring 22,742 call options. This figure marks an increase of 488% compared to the typical volume of 3,868 call options.

As trading opened on Friday, shares of Papa John’s were priced at $41.08, reflecting a decline of 4.1%. The stock’s fifty-day moving average is $48.22, while the two-hundred day average stands at $45.53. Over the past year, Papa John’s has fluctuated between a low of $30.16 and a high of $56.23. The company currently holds a market capitalization of $1.35 billion and reports a price-to-earnings (P/E) ratio of 18.18.

Recent Earnings Report and Dividend Announcement

Papa John’s released its latest earnings report on November 6, 2023, revealing earnings per share (EPS) of $0.32. This performance fell short of analyst expectations, which had estimated an EPS of $0.40. The company reported a net margin of 3.58% and a negative return on equity of 14.42%. Revenue for the quarter reached $508.15 million, below the anticipated $523.67 million. This figure signifies a slight increase of 0.3% year-over-year, compared to $0.43 EPS in the same quarter last year.

Additionally, the company announced a quarterly dividend of $0.46, scheduled for distribution on November 28, 2023. Shareholders on record by November 17, 2023 will receive this payment, representing an annualized dividend of $1.84 and a yield of 4.5%. The dividend payout ratio currently stands at 81.42%.

Analyst Ratings and Institutional Investments

Recent evaluations from several research analysts have influenced perceptions of Papa John’s stock. Zacks Research downgraded the rating from “hold” to “strong sell” on October 20, 2023. Conversely, Stifel Nicolaus adjusted their target price from $38.00 to $42.00, maintaining a “hold” rating on August 15, 2023. Benchmark reaffirmed a “buy” rating, increasing their price target to $60.00, up from $50.00, on August 11, 2023. Meanwhile, Stephens reduced their target from $50.00 to $49.00 with an “overweight” designation.

Currently, four analysts have issued a “buy” rating, while nine maintain a “hold” rating and one has rated it as a “sell.” The consensus rating for Papa John’s is “hold,” with an average price target of $50.50, according to data from MarketBeat.

Institutional investors have also made adjustments to their holdings in Papa John’s. Bank of America Corp DE increased its stake by 10.5% during the second quarter, now owning 1,700,062 shares valued at $83,201,000. Deprince Race & Zollo Inc. raised its holdings by 0.7%, while Segall Bryant & Hamill LLC expanded its position by 18.9%. Other firms, such as Geode Capital Management LLC and Brandes Investment Partners LP, also reported increased ownership in the company.

Papa John’s International operates and franchises pizza delivery and carryout restaurants, structured into segments including Domestic Company-owned Restaurants, North America Franchising, North America Commissaries, and International Operations. The company continues to navigate a competitive landscape while adapting to market changes and investor expectations.