Cautious Analyst Sentiment on Papa John’s (PZZA) As Refranchising and Cost Reductions Drive Strategy

Core Viewpoint - Papa John's International, Inc. (NASDAQ:PZZA) is considered one of the best restaurant stocks to buy currently, with a significant portion of analysts expressing bullish sentiment amid strategic initiatives and expansion plans [1]. Group 1: Analyst Sentiment and Price Targets - As of January 6, 2026, approximately 40% of analysts are bullish on Papa John's, with a median price target of $48.00, indicating an upside potential of 20.40% [2]. - Jefferies recently reiterated a "Hold" rating with a price target of $45, while Stifel also maintained a "Hold" rating with a target of $42, following their analysis of the company's 10-Q filing [2]. - The updates from analysts reflect adjustments in financial models to account for Papa John's planned cost-saving initiatives and refranchising strategy [2]. Group 2: Strategic Initiatives - Papa John's announced the refranchising of 85 restaurants in the Washington, D.C., and Baltimore markets to Pie Investments, following the retirement of a long-time franchise partner [2]. - The company plans to open 52 additional restaurants by 2030 in the Greater Philadelphia, Washington, D.C., and Baltimore markets [2]. - For fiscal 2026, the projected EBITDA is approximately $205 million, representing about 4% year-over-year growth, although this is below the Street consensus estimate of $213 million [2]. Group 3: Marketing Investments - Stifel noted that the EBITDA forecast could vary based on potential incremental investments in marketing, with Papa John's having already invested $25 million in marketing in 2025 [2]. - The firm's projections include an additional $10 million investment in marketing for the upcoming period [2]. Group 4: Company Overview - Papa John's operates one of the world's largest pizza restaurant chains, with around 6,000 restaurants across approximately 50 countries and territories [2].