Papa John's Stock Rises on Buyout Reports

Earlier this year Papa John's CEO resigned after being slammed for making a racial slur

by Emma Duncan

Published on Oct 9, 2018 at 9:40 AM

Controversial pizza chain Papa John's International, Inc. (NASDAQ:PZZA) is back in headlines this morning, this time because of takeover rumors. A report from the Wall Street Journal (subscription required) said that Nelson Peltz's Trian Fund Management -- which owns a 13% stake in fast food chain Wendy's (WEN) -- is evaluating a bid for the company. In response, shares of PZZA are up 6% at $53.44, at last check.

It's been anything but positive for Papa John's stock over the past year, as it's shed 28% year-over-year, and in mid-August plunged to a three-year low of $38.05. Adding resistance has been the 160-day moving average, a trendline which has pressured the shares since early 2017.

Surprisingly, analyst sentiment has been optimistic toward Papa John's stock, with four of the six covering analysts sporting a "strong buy" recommendation. However, the stock's average 12-month price target of $51.17 comes in at a deficit to current levels.

Also sporting optimism have been near-term options traders. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 0.37, which ranks in the low 13th percentile of its annual range. In other words, near-term options traders have rarely been more call-biased in the past year.

Lastly, while short interest on PZZA rose just 1.5% during the most recent reporting period, it currently represents 23% of the stock's total available float. At its average daily trading volume, it would take shorts over a week to buy back their bearish bets on Papa John's stock.


a schaeffer's exclusive

5 NEW STOCK PICKS

We're celebrating 38 years with this FREE insider report!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


What's Next for the American Wealth Gap
Porter Stansberry is predicting a major change in the American economic system.
GDP, Consumer Spending Data in Post-Fed Spotlight
Next week will feature the final second-quarter GDP and fresh housing market data
Oversold Pot Stock Catches a Lift
PRVB stock is eyeing its lowest close in months, while IGC stock is set for a big win
What's Next for the American Wealth Gap
Porter Stansberry is predicting a major change in the American economic system.