Editor’s note: This article has been updated to reflect that the reported Papa John's takeover story circulated by ABC Money was false.
Shares of Papa John's International, Inc. (NASDAQ:PZZA) moved higher Monday after a report from ABC Money claimed that private equity firm TriArtisan Capital Advisors was leading a $65-per-share takeover bid. That report was later determined to be inaccurate.
- PZZA is charging ahead with explosive momentum. Get the latest updates here.
What To Know: Papa John's stock spiked on Monday, closing the day up more than 7% as the rumor spread. Benzinga Pro data shows shares were fluctuating amid investor reaction to the now-disputed claim.
Papa John’s reported third-quarter earnings last week, missing estimates on the top and bottom lines. Third-quarter revenue of $508.15 million fell short of estimates of $523.79 million, and adjusted earnings of 32 cents per share was below forecasts of 41 cents per share.
Several analysts dropped their price targets in response to earnings. BMO Capital analyst Andrew Strelzik lowered its price target to $54 from $60 and kept an Outperform rating. Stephens analyst Jim Salera lowered its target to $49 from $50 and kept an Overweight rating
PZZA Analysis: Papa John’s is trading approximately 8.5% below its 50-day moving average of $48.22 and just 0.5% below its 200-day moving average of $44.35. The proximity to these moving averages suggests that the stock is at a critical juncture, where a sustained move above these averages could signal a potential reversal in its longer-term trend. The relative strength index (RSI) is at 33.52, indicating a neutral position, which could imply that the stock has room to move either way depending on market sentiment.
In terms of support and resistance levels, the calculated support stands at $38.25, while resistance is identified at $49.00. Should the stock maintain its current momentum, overcoming the resistance level could pave the way for a more robust rally, potentially targeting the upper end of its 52-week range. Conversely, if the price retraces, the support level at $38.25 will be critical in determining whether the recent gains can be sustained.
PZZA Price Action: Papa John’s shares closed Monday up 7.04% at $43.97. The stock is trading within its 52-week range of $30.16 to $55.74.
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