PZZA - Papa John's is a top pick at Oppenheimer with sales expected to stay strong

Oppenheimer called out Papa John's International (NASDAQ:PZZA) as a top pick after the recent pullback in Q1 of more than 20% created a buying oportunity for investors. In the near-term, the firm thinks Papa John's (PZZA) can top Q1 same-store sales estimates despite the Omicron headwind in January, while the delayed menu pricing hikes could provide a boost in Q2 and Q3. Analyst Brian Bittner: "We believe the buy-side bar has been overly reduced on sales concerns and commodity cost increases. Our analysis suggests these worries under-appreciate PZZA's tools in 2022 to: 1) take share and drive solidly positive SSS, 2) hold EBIT margins in face of inflation, and 3) generate EPS upside vs Street's +4.5% growth. Our bullish stance is also enabled by PZZA's 20% valuation discount to DPZ, despite a multi-year runway for AUV expansion and accelerating unit growth." Oppenheimer assigned a price target of $140 to PZZA

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Papa John's is a top pick at Oppenheimer with sales expected to stay strong