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

Papa John’s International, Inc. (NASDAQ:PZZA) saw a significant spike in options trading on Friday, with investors purchasing a remarkable 22,742 call options. This figure represents an astonishing increase of 488% compared to the typical volume of 3,868 call options. This unusual activity occurs in the context of the company’s recent earnings report, which was released on November 6, 2023.

On the same day, Papa John’s shares opened at $41.08, reflecting a decline of 4.1%. Over the past year, the stock has fluctuated significantly, reaching a low of $30.16 and a high of $56.23. Currently, the company boasts a market capitalization of $1.35 billion and a price-to-earnings (P/E) ratio of 18.18, indicating a stable investment profile in the fast-food sector.

Papa John’s reported earnings of $0.32 per share for the last quarter, falling short of analyst expectations, which had estimated $0.40 per share. The firm recorded a net revenue of $508.15 million, underperforming against the projected $523.67 million. This represents a modest year-over-year revenue increase of 0.3%. Analysts forecast that the company will achieve earnings per share (EPS) of 2.19 for the current fiscal year.

Dividend Announcement and Analyst Ratings

In addition to its earnings report, Papa John’s declared a quarterly dividend of $0.46 per share, scheduled for payment on November 28, 2023. Shareholders on record by November 17, 2023, will receive this dividend, translating to an annualized yield of 4.5%. The dividend payout ratio is currently at 81.42%.

Recent analyst activity has also influenced the stock’s outlook. Zacks Research downgraded the stock from a “hold” to a “strong sell” rating on October 20, 2023. Conversely, Stifel Nicolaus raised their target price for the shares from $38.00 to $42.00 while maintaining a “hold” rating. Benchmark reiterated a “buy” rating, increasing the price target to $60.00. Meanwhile, Stephens adjusted their price objective from $50.00 to $49.00, categorizing the stock as “overweight.”

As of now, the consensus rating for Papa John’s stands at “hold,” with an average price target of $50.50 according to MarketBeat.

Institutional Investment Trends

Recent movements among institutional investors have also shaped the company’s financial landscape. Bank of America Corp DE increased its holdings in Papa John’s by 10.5%, now owning 1,700,062 shares valued at approximately $83.2 million. Deprince Race & Zollo Inc. and Segall Bryant & Hamill LLC also raised their stakes in the company, reflecting growing confidence among institutional investors.

Papa John’s operates as a leader in the pizza delivery and carryout industry, providing a wide range of products through various segments, including domestic company-owned restaurants and international operations. As the company navigates these market fluctuations and investor sentiments, its performance in the coming quarters will be closely monitored by analysts and shareholders alike.