Papa John’s downgraded to Hold from Buy at Stifel

Stifel analyst Chris O’Cull downgraded Papa John’s to Hold from Buy with a price target of $65, down from $81. Despite delivering better than expected North America comp and margin performance driven by transaction growth, Papa John’s posted disappointing Q3 earnings due to greater than expected dilution from the recently acquired franchise stores in the U.K., the analyst tells investors in a research note. The firm says the company’s performance during the next several quarters will be volatile given the U.K. market turnaround, sales and development obstacles in key international markets, like the Middle East, and Stifel’s view that the promotional activity in the U.S. pizza segment has intensified.