Tuesday November 6, 2018, 00:00:00
After today’s market close, Papa John’s (PZZA; Buy) reported adjusted Q3 EPS of $0.20. This was below our $0.25 forecast and the sell-side consensus estimate (according to Consensus Metrix) of $0.22. The company also updated its full-year 2018 EPS target range to $1.30-$1.60 (the previous target had been $1.30-$1.80). With the first three quarters of 2018 reported, and doing the math, the updated fullyear 2018 EPS target range implies a Q4 EPS target range of $0.01-$0.31. With the Q3 EPS miss, and us believing it prudent at this time to not be at the high end of this implied Q4 EPS target range, we lower our Q4 EPS estimate by $0.11, to $0.20 (from $0.31). This brings down our full-year 2018E EPS estimate by $0.16, to $1.49. Given this lower base of anticipated earnings coming off of this year, we also take down our 2019E EPS estimate by $0.05, to $1.45 (keeping in mind that earnings year-overyear in both Q1 2019 and Q2 2019 are likely to be down).