Papa John's International: Stephens Raises PT to $52 from $50.

Papa John's International: Stephens Raises PT to $52 from $50.

Papa John's International (PZZA) has seen a significant boost in its stock price following the company's Q2 2025 earnings report. The stock, which was down 65.56% year-to-date before the report, surged by nearly 8% to $43.67. The positive sentiment is largely driven by the company's upbeat international comparable sales forecast and strong financial performance.

The company raised its 2025 international comparable sales forecast to a range of 2%-4%, up from a previously flat to up 2% range. This upward revision reflects the company's optimism in its international expansion strategy, particularly in markets like Asia and Europe, where it aims to open 180-200 new units [3]. The increase in international sales, up 4% in Q2, despite higher costs, underscores the effectiveness of the company's product innovations, such as the Cheddar Crust and Shaq-a-Roni pizzas, and its enhanced loyalty program, which has added 37 million new members [3].

PZZA's Q2 revenue rose to $529.2 million, a 4% increase from the previous quarter, driven by higher commissary revenues and partially offset by lower company-owned restaurant revenues due to U.K. refranchising and market optimization [2]. The company's adjusted earnings per share for the quarter came in at 41 cents, beating analysts' estimates of 33 cents. The positive earnings performance was driven by transaction gains from increased customer visits, following the company's focus on its core pizza business [1].

Stephens, a leading financial services firm, has raised its price target for PZZA to $52 from $50, citing the company's strong Q2 earnings and the positive outlook for international expansion. The firm highlighted the company's ability to blend operational discipline with creative disruption, which has helped it navigate the challenges of inflationary pressures and shifting consumer preferences in the fast-food sector [3].

However, the company faces several challenges, including ongoing pressures on company-owned restaurant EBITDA margins from labor, aggregator fees, and food costs, particularly cheese and proteins. Additionally, the company is monitoring competitive promotional activity and is prepared to "check and adjust" strategies as needed. Despite these challenges, Papa John's management remains focused on sustaining momentum through the second half of 2025 and beyond, with a disciplined, data-driven approach [2].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3TZ1LZ:0-papa-john-s-jumps-after-upbeat-annual-international-comparable-sales-forecast/
[2] https://seekingalpha.com/news/4481570-papa-johns-raises-international-sales-outlook-to-2-percentminus-4-percent-as-transformation
[3] https://www.ainvest.com/news/papa-john-q2-2025-earnings-critical-inflection-point-brand-transition-2508/