Papa John's shares jumps after analyst recommendation

On Friday, shares of pizza giant Papa John’s International Inc raised after KeyBAn Capital markets analyst recommended investors to buy the stock because of its management team, cost-cutting plans and potential for growth.

Its shares rose 87 cents or 4.3 percent to $21.12.

Analyst Brad Ludington started the coverage on the stock with a "Buy" rating and a share price target of $30. A note to investors, Ludington said Papa John's is "well positioned" to continue reporting growth in same-store sales, or sales at locations open at least a year.

"While issues such as higher gasoline prices, events such as the Olympics, political conventions and debates, and higher utility costs have resulted in declining same-store sales trends at many casual dining and limited service restaurant chains, we believe that they have provided an opportunity for Papa John's," the analyst said.

Exchange deals

Since the company is offering a deal that could feed a group of four or more people for less than $20, Ludington said that more consumers have been staying home due to slow economy and events on TV. The company is selling the XL Explorer pizza with up to three toppings for $13.99. That pizza is about 30 percent bigger than a large.

Ludington also said the company has the potential for more than 800 more restaurants in under-penetrated domestic markets.

He added that the company's management team has "proven its ability to remain relevant and innovative in the highly commoditized pizza segment of the restaurant industry."