Papa John’s Stock Drops 10% as Private Deal Withdrawn

Papa John’s stock (PZZA) has experienced a significant decline of 10% following the withdrawal of Apollo Global’s offer to take the pizza chain private. Initially, Apollo and Irth Capital Management submitted a bid of $64 per share. However, Apollo Global has reconsidered its intentions for the buyout.

Impact of Economic Trends

This news comes as Papa John’s prepares to disclose its third-quarter financial results on November 6. There are indications of a broader trend affecting the restaurant industry, as consumer spending decreases amid a slowing U.S. economy.

Declines in Consumer Spending

• Chipotle Mexican Grill noted a 0.8% decline in customer traffic, marking three consecutive quarters of decreases.
• Procter & Gamble reported reduced spending among lower-income consumers, indicating a shift in purchasing behavior.

Strategic Moves in the Restaurant Sector

In related news, Yum Brands announced it would review strategic options for Pizza Hut, which may include potential sale considerations due to its struggles in the market.

Analyst Opinions on Papa John’s Stock

Despite the recent decline, Papa John’s stock maintains a consensus rating of Moderate Buy among ten Wall Street analysts. This rating includes three Buy recommendations and seven Hold ratings issued in the past three months.

The average price target for PZZA stands at $52.29, projecting a potential upside of 21.18% from current stock levels. Investors are keenly watching how these developments unfold and their implications for the future of Papa John’s.