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Fly News Breaks for September 27, 2018
SONC, PZZA
Sep 27, 2018 | 07:53 EDT
Jefferies analyst Alexander Slagle continues to believe Q3 will represent the worst in terms of fundamentals for Papa John's (PZZA) and that "ultimate upside potential outweighs downside." The analyst recommends looking past fear of near-term trends and buying shares of Papa John's. An analysis of potential refranchising and leveraged buyout scenarios suggest there continues to be opportunities for value creation, Slagle tells investors in a research note. The analyst says that even without a buyout, there is a three-to-five year path to recovery that could return Papa John's to its normalized earnings/EBITDA levels and growth rate, potentially driving $4.00-plus of earnings per share by 2020. Slagle adds that based on this week's acquisition of Sonic (SONC) by Inspire Brands, Papa John's would be worth $63.50 per share in a buyout. He keeps a Buy rating on Papa John's with a $58 price target.
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