After Mixed Q4, Some Still See Papa John's As Patriarch Of The Pizza Space

Stephens still find value in Papa John's Int'l, Inc. PZZA despite the pizza company’s mixed fourth-quarter results that saw an EPS beat, with revenue missing the mark.

Papa John's company-owned SSS of +4.8 percent came in below consensus estimate of +6.5 percent, and revenue of $439.6 million missed the Street view of $445.9 million. However, adj. EPS of $0.69 beat $0.66 Street view, as commodities and sales leverage offset higher labor costs.

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Analyst Will Slabaugh, who has an Overweight rating on the stock, said though comps were weaker-than-expected, it outperformed the industry.

“Further, we believe that PZZA is a uniquely positioned story that investors will continue to favor over a multi-year period, given its leadership in technology and convenience,” Slabaugh wrote in a note.

For FY 2017, the company expects EPS growth of 8 to 12 percent and North America SSS growth of 2 to 4 percent (versus consensus of 3.5 percent).

At last check, shares of Papa John’s fell 5.99 percent to $80.50. Slabaugh has a price target of $100, implying a potential upside of 24 percent from the current levels.