Papa John's CFO Departure Suggests Sharp Turnaround Not Imminent, BofA Says
Papa John's International's (PZZA) chief financial officer's departure likely suggests a sharp operational turnaround is unlikely in the near term at the pizza chain, BofA Securities said in a note Monday. Last month, Papa John's appointed Chris Collins as interim finance chief, replacing Ravi Thanawala, who will take on the CFO role at apparel retailer American Eagle Outfitters (AEO). "We think it's unlikely (Thanawala) would have left his post after less than three years if he believed a sharp turnaround were imminent," BofA analysts Sara Senatore and Grace Nguyen said. The brokerage downgraded its rating on Papa John's stock to underperform from neutral and decreased the price target on the company's shares to $34 from $42. Papa John's global comparable sales fell 4% in the first quarter, driven by weakness in North America. In May, the company set its full-year global system-wide restaurant sales outlook at flat to down low single-digits, with North American comparable sales projected to decline 2% to 4%. "The disruption that comes with management turnover -- particularly at a time when Papa John's is trying to execute a turnaround -- may translate into less earnings.
Papa John's International's (PZZA) chief financial officer's departure likely suggests a sharp operational turnaround is unlikely in the near term at the pizza chain, BofA Securities said in a note Monday.
Last month, Papa John's appointed Chris Collins as interim finance chief, replacing Ravi Thanawala, who will take on the CFO role at apparel retailer American Eagle Outfitters (AEO). "We think it's unlikely (Thanawala) would have left his post after less than three years if he believed a sharp turnaround were imminent," BofA analysts Sara Senatore and Grace Nguyen said.
The brokerage downgraded its rating on Papa John's stock to underperform from neutral and decreased the price target on the company's shares to $34 from $42.
Papa John's global comparable sales fell 4% in the first quarter, driven by weakness in North America.
In May, the company set its full-year global system-wide restaurant sales outlook at flat to down low single-digits, with North American comparable sales projected to decline 2% to 4%. "The disruption that comes with management turnover -- particularly at a time when Papa John's is trying to execute a turnaround -- may translate into less earnings.