Papa John's May See 'Powerful Revisions' to Street Estimates Through 2022 After Strong First Quarter, Oppenheimer Says
02:24 PM EDT, 05/07/2021 (MT Newswires) -- Papa John's International (PZZA) is expected to see "powerful revisions" to Street sales and earnings before interest, taxes, depreciation and amortization estimates through the fiscal year 2022 following better-than-expected operating metrics in the first quarter, Oppenheimer said Friday.
The investment firm raised its EBITDA estimates on the pizza restaurant operator by 14% in 2021 and by 13% in 2022, while maintaining its outperform rating and $125 price target.
The company anticipates "flat to slightly positive" second-quarter comparable sales growth in North America, said Chief Executive Robert Lynch in an earnings call, according to a Capital IQ transcript.
"This will force material near-term revisions to Street's 2Q21/3Q21 forecast of negative 6%/negative 3% as our (same-store sales) forecasts turn positive," said Oppenheimer analysts.
The Street's 2021 restaurant margin forecast of 19.9% "now appears too low" after the company delivered 21% in the first quarter, representing an annual increase of 90 basis points, the firm added.
Papa John's also expects unit growth of 2.6% to 3.3% for 2021, representing additional 140 to 180 net units. "Unit growth is positioned to accelerate this year with a path for attractive gains into (2022) and beyond supported by a surging development pipeline," according to Oppenheimer.
Price: 100.56, Change: -0.33, Percent Change: -0.33