Freedom Broker issues short-term 'buy' for Papa John's as turnaround continues

Freedom Broker has put out a short-term trade idea to buy shares of pizza chain Papa John's. In the next two months, the stock has upside of almost 16%, Freedom Broker estimates. The company has had a rough last few years, but new leadership is implementing a new course, betting on tech innovation and expanding internationally.

In a note seen by Oninvest, Freedom Broker says to buy shares of Papa John's, one of the largest pizza chains in the world, with more than 6,000 locations in almost 50 countries. It has set a target price of $52 per share over a horizon of two months. This implies upside of 16% relative to current quotes. On Friday, July 18, Papa John's closed at $45 per share.  

Papa John’s has undergone a turbulent seven-year stretch, but the pizza chain is now charting a new course under fresh leadership, Freedom Broker noted. The company’s updated strategy prioritizes technology and international expansion.

This new course is already showing results. In the first quarter, Papa John’s reported a 1% year-over-year increase in revenue to $1.2 billion. While North American sales declined, international growth helped offset the weakness.

Freedom Broker also suggested the brand could emerge as a relative winner in a cooling U.S. consumer environment. As household budgets tighten, Papa John’s may be seen as a more affordable alternative to full-service restaurants. According to the Bureau of Economic Analysis, consumer spending, which accounts for over two thirds of the U.S. economy, fell 0.1% month over month in May, marking the slowest pace of the year, Bloomberg reported.

Papa John’s troubles date back to late 2017, when founder John Schnatter became embroiled in a scandal over racist remarks. According to media reports, Schnatter used a racial slur during a company conference call. Following two years of legal disputes with the company, he ultimately stepped down from all management roles.

In 2019, Papa John’s brought on activist investor Starboard Value, a move that helped stabilize its financial position. At the time, however, there was talk of the company going private, Reuters reported. It was argued that operating as a private company could give Papa John’s more flexibility to implement structural changes without the scrutiny of public markets.

Talk of a take-private deal resurfaced in 2025. In February, Semaphore reported that Irth Capital – an investment fund backed by members of Qatar’s royal family – was exploring a potential acquisition of the pizza chain. The report sent Papa John’s shares up 18% in a single day. Six months later, Reuters sources said that Irth Capital had been joined by Apollo Global Management, and that the two firms had made a joint bid for the company.

Papa John's has gained almost 10% since the beginning of the year. Still, Wall Street is cautious on the name, according to MarketWatch. The most common rating is "hold" (nine analysts); another seven analysts have the stock as a "buy" and one as a "sell." The average target price of $46.55 per share is 3.4% above current quotes.

The AI translation of this story was reviewed by a human editor.