Papa John’s Stock (PZZA) Swings on Buyout Rumours – What Happened?

Papa John's stock (NYSE: PZZA) is in the midst of a volatile trading day today, following conflicting reports regarding a potential buyout. PZZA initially surged on unconfirmed reports of a $65 per share buyout offer from TriArtisan, only to retreat as the rumors were subsequently refuted by another unconfirmed source.

The stock, which was briefly halted in early trading, reached an intraday high of $48.83 before falling back to $42.87, up 4.36% from the open. This price action underscores the market's speculative interest in Papa John's, juxtaposed against the company's recent financial performance and revised outlook. 

This volatility follows a period of heightened acquisition speculation for Papa John's. In June, reports surfaced of a joint proposal from Apollo Global Management and Irth Capital Management to take the company private at just over $60 per share, valuing the company at approximately $1.7 billion, which initially boosted the stock by 7.5%. However, Apollo Global later withdrew its $2.1 billion offer at $64 per share, citing concerns over the company's anticipated third-quarter earnings and broader market conditions. This withdrawal triggered a sharp decline in Papa John's stock, reducing its market capitalization to around $1.27 billion.

Adding to the uncertainty, Papa John's third-quarter earnings missed expectations, leading the company to lower its 2025 North American sales forecast to a decline of 2%–2.5%, a significant revision from the previous projection of flat to 2% growth. The company cited softer consumer spending as a contributing factor, emphasizing a focus on brand transformation and cost-cutting measures to address the challenges.

Analyst reactions to these developments have been mixed. BMO Capital lowered its price target from $60 to $54 while maintaining a ‘Buy' rating. Similarly, Stephens reduced its price target from $50 to $49, also keeping a ‘Buy' rating. In contrast, Bank of America Securities downgraded the stock from ‘Buy' to ‘Neutral', decreasing its price target from $62 to $50.

Price Targets

The conflicting buyout reports and the subsequent price swings have brought significant action to Papa Johns today. Until there is comment from either party, or from a substantiated source from with the company, it would be best to chalk this off to rumours.