By Mark Kalinowski
Published on February 4, 2019 at 12:00 AM
Earlier today, Papa John’s (PZZA; Buy) announced that it has received a $200 million strategic investment from Starboard Value LP. In addition, Starboard CEO Jeffery Smith has been added to Papa John’s board and now becomes Papa John’s Chairman. Also, the board adds Anthony Sanfilippo (former Chairman and CEO of Pinnacle Entertainment) and Steve Ritchie (current President and CEO of Papa John’s). On this latter front, and particularly with Mr. Ritchie’s appointment being announced in the same press release as Starboard’s investment being announced, this seems to signal Starboard’s approach (at least initially) is generally “on the side” of Mr. Ritchie’s strategic plans for Papa John’s.
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By Mark Kalinowski
Published on December 13, 2018 at 12:00 AM
Earlier today, Starbucks (SBUX; Neutral) hosted its every-two-years Analyst Meeting, this time around in New York City. In our view, the strategic path that Starbucks laid out — under the “Growth at Scale” theme — looks reasonable to us. Also, on the positive side, the transition from Starbucks being “founder-led” to “founder-inspired” — always a tricky thing to navigate for pretty much any company of size — seems to have gone relatively well, all things considered (meaning, look at examples of companies that didn’t get that transition right). On the risk side of the equation, some of the most challenging risks are to a meaningful degree outside of Starbucks’ control, with Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral] recently launching its revamped espresso platform nationwide in the U.S.), and privately-held Luckin Coffee — which ended 2017 with zero stores in China — now at 1,700+ units in that key market (and growing rapidly). That said, Starbucks understands that its brand is different from others in the coffee marketplace, including (but not limited to) Dunkin’ and Luckin Coffee, and will seek to further differentiate the Starbucks brand going forward. We tweak our fiscal 2019E and fiscal 2020E EPS estimates downward by $0.01 each, to $2.65 and $3.00, respectively. We reiterate our Neutral rating on SBUX, and note the following:
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