This Pizza Stock Is a Solid Bet for Options Bulls

Papa John's isn't viewed favorably by analysts-- a possible contrarian tailwind

Dec 3, 2021 at 11:47 AM
facebook X logo linkedin


The shares of Papa John's Int'l, Inc. (NASDAQ:PZZA) are breaking out in a flag pattern, with support from the 20-day moving average, as well as the +50% year-to-date level. What’s more, the stock is surging back above its September highs, after reporting a quarterly top- and bottom-line beat in November, and hiring more than 20,000 employees this year. In other words, now seems like a great time to bet on a move higher for PZZA.

 

 
Though the brokerage bunch is already mostly optimistic towards Papa John’s stock, there is still plenty of room for upgrades. Of the 14 analysts in coverage, nine call PZZA a “strong buy,” while five say “hold.” Should some of these firms start to change their tune, the equity could surge even higher.

A sentiment shift over in the options pits could create additional tailwinds for the security. This is per PZZA’s 50-day put/call volume ratio of 1.51 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 76% of readings from the past 12 months. This means long puts have been getting picked up at a much faster-than-usual pace in the last two months.

The equity sports affordably priced premiums at the moment, too. This is per PZZA’s Schaeffer's Volatility Index (SVI) of 32%, which sits higher than 19% of readings from the past year. To put it simply, options players are pricing in relatively low volatility expectations right now.

Our recommended call has a leverage ratio of 5.3, and will double in value on an 19.6% rise in the underlying equity.

 

Subscribers to Schaeffer's Weekend Trader options recommendation service received this PZZA commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI