Papa John’s International Inc. PZZA, +5.28% is in need of a buyer, say Stifel analysts led by Chris O’Cull. The pizza delivery company, which has been battling its founder John Schnatter for months, reported a loss of 41 cents per share, after profits of 60 cents per share last year, and adjusted EPS of 20 cents. Sales of $364.0 million were down from $431.7 million last year. Both results missed the FactSet consensus for EPS of 22 cents and sales of $391.0 million. North American same-store sales fell 9.8%, ahead of the 10.6% decline FactSet expected. Shares have increased 37.6% over the last three months, a rise that Stifel attributes to investor expectations that the company will be acquired. There has been speculation abouta buyout, but the company didn’t comment on the issue during the late Tuesday earnings call. “[G]iven the deteriorating fundamentals, investors need the company to find a buyer soon, in our opinion,” Stifel wrote. “[W]e believe the lackluster fundamental performance has moved the company’s board to pursue strategic alternatives, including sales of the company.” Stifel maintains its hold stock rating because of the buyout potential. Stifel’s price target is $48. BTIG also maintains its neutral rating. “We believe much work still needs to be done to regain consumer trust, support franchise economics and stave off elevated unit closures,” analysts wrote. “We expect these efforts to weigh on profitability and cash flows.” Papa John’s shares are up 5.6% in Wednesday trading, but down 2% for the past year. The S&P 500 index SPX, +1.31% is up 7.6% for the last 12 months.
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