Shares of Papa John’s International rose 2.8% on Tuesday after the company reported preliminary comparable sales growth for September and fiscal 3Q ending Sept 27.
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Papa John’s (PZZA) North American Sept. systemwide comparable sales rose 18.4%, marking six straight months of double-digit growth. The domestic company-owned restaurant comps were up 14.3% while North America franchised restaurants delivered comps growth of 19.7%. Sept. comps for international restaurants were up 23.3%.
For fiscal 3Q ending Sept. 27, the systemwide North America comps increased 23.8% and the international systemwide comps rose 20.6%.
Due to the spread of COVID-19 and government restrictions, about 90 of the 2,100 international franchised locations are temporarily closed currently. Meanwhile, almost all of the North American locations are open. (See PZZA stock analysis on TipRanks)
Papa John’s President & CEO Rob Lynch said, “We remain confident that our innovation pipeline, marketing, and technology platforms, and strong operations will continue to support strong results during, and after, the pandemic.”
Last month, Stephens analyst James Rutherford reiterated his Buy rating for Papa John’s with a price target of $108 following the company’s August comps announcement. The analyst called the 26.1% North America franchised growth in August “a positive surprise” and stated that he is encouraged by the continued strength and sees it as a sign that consumers are returning to and staying with the brand.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 7 Buys and 3 Holds. With shares up 35.8% year-to-date, the average price target of $106.67 implies an upside potential of 24.4% from the current levels.
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