Despite the recent decline in Papa John’s (PZZA) stock price, analysts expect the company’s stock to reach $90.17 in the next 12 months, which represents a return potential of 23.6%.
The implementation of technological advancements and measures to improve menu items may have prompted analysts to maintain target prices. The entry of new players into the delivery services space appears to have had no impact on analysts.
The target price and return potential for Papa John’s peers are as follows.
Of the six analysts who follow Papa John’s, 66.7% recommend a “buy” and 33.3% recommend a “hold.” None of the analysts recommend a “sell.” On July 31, before the announcement of the company’s 2Q17 earnings, Instinet lowered its target price from $84 to $78 while maintaining its “neutral” rating.
Papa John’s stock moves in tandem with analysts’ ratings. If analysts raise their target prices, the stock price rises and vice versa. Papa John’s is currently trading below its target price. But this doesn’t mean an automatic “buy.” Investors have to carefully analyze the kinds of parameters we discussed in this series before making any decisions.