Analysts’ expectations

For 2019, Papa John’s (PZZA) management has set an EPS guidance of $0–$0.50. However, removing special items, the company expects the adjusted EPS to be $1.00–$1.20. Papa John’s expects its effective tax rate to be 21%–24%—compared to 44.9% in 2018.

For the same period, analysts expect Papa John’s to post an adjusted EPS of $1.10, which represents a fall of 17.9% from $1.34 in 2018. The decline in the company’s revenues and lower net margins are expected to lower the EPS.

Analysts expect Papa John’s 2019 net margins to fall from 2.7% in 2018 to 2.2%. The company’s increased investments to drive its sales and negative same-store sales growth are expected to offset the positive effects of the lower effective tax rate. Analysts expect the company’s net margins to decline.

Papa John’s EPS: Analysts’ Expectations in 2019

Peer comparisons

In 2019, Domino’s Pizza (DPZ) is expected to post an adjusted EPS of $9.38—11.4% growth from $8.42 in 2018. For the same period, analysts expect Yum! Brands’ (YUM) EPS to rise 20.3% to $3.81.

Dividends

On January 30, Papa John’s announced quarterly dividends of $0.225 per share at an annualized payout rate of $0.90 per share. As of March 5, the company’s dividend yield was 1.98% with the stock price trading at $45.56. On the same day, Yum! Brands and Domino’s Pizza’s dividend yields were 1.75% and 0.88%, respectively.

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