On Thursday, Benchmark analyst Todd Brooks revised the price target for Papa John's International Inc. (NASDAQ:PZZA) shares to $87.00, down from the previous target of $95.00. Despite the adjustment, the analyst sustained a Buy rating on the stock.
Papa John's announced on Wednesday that CEO Rob Lynch would be departing after a five-year tenure to assume the role of CEO at Shake Shack (NYSE:SHAK). Lynch is credited with leading Papa John's through significant brand recovery, and his exit is considered a setback for the company.
The search for a new leader to continue the "Back-to-Better 2.0" initiative, unveiled in January, is underway. In the interim, CFO Ravi Thanawala, who joined the company in July 2023, will take on the CEO responsibilities.
The company has confirmed its financial outlook for the fiscal year 2024, projecting an adjusted operating income ranging between $153 million and $163 million. This reaffirmation aligns with Benchmark's estimate of $155 million.
However, the uncertainty surrounding the company's long-term leadership during a crucial period of operational execution has prompted the reduction in the price target. Benchmark now applies a 14x forward adjusted EBITDA multiple to Papa John's shares, which is reflected in the new price target.
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