Investors' Mouths Water At The Rumored Launch Of A Papa John's Pan Pizza

Following rumors that Papa John's Int'l, Inc. (NASDAQ: PZZA) could announce the launch of pan pizza later Monday, BTIG said it sees the potential launch as a driver for both comparable store sales and traffic. The speculation is based on the product recently being added to restaurants in several markets and indications in the company's social media channels that a significant announcement is forthcoming this afternoon.

Pan Pizza's Fizz

Analyst Peter Saleh estimates that pan pizza accounts for roughly 20 percent of the U.S. pizza category. The analysts noted that Domino's Pizza, Inc.(NYSE: DPZ), which had launched its own pan pizza in September 2012, saw both its sales and traffic increase, with the product contributing at least 100–200 basis points to comps.

Papa John's To Benefit On Top, Bottom Line

BTIG believes Papa John's could see a similar benefit in the coming quarters. Accordingly, the firm raised its fourth quarter comp. estimates by 50 basis points and that for 2017 by 80 basis points. Given expectations for stronger sales, the firm raised its 2017 earnings per share estimate to $2.76 from $2.72.

BTIG has a Buy rating and a $87 price target on the shares of Papa John's.

At the time of writing, Papa John's shares were up 2.21 percent at $77.53.

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