July 20, 2016

EVERYTHING OLD IS NEW AGAIN: Papa John’s upgraded on belief civil unrest is encouraging more pizza delivery:

Papa John’s International Inc. was upgraded to overweight from sector weight at KeyBanc Capital Markets with analysts expressing the surprising* view that diners, concerned about political and civil unrest, are choosing to stay home for pizza delivery rather than head out for a meal.

Papa John’s price target is $80, or about 16% above its current trading level.

“After speaking with several large operators and industry contacts, we believe the recent decline in casual dining restaurant segment fundamentals—traffic down 3% to 5% the past several weeks—may be the result of consumers eating more at home amid the current political/social backdrop, which we believe could last through the November election,” KeyBanc analysts wrote in a note published Tuesday.

Shades of Faith Popcorn’s “Cocooning” thesis from her much-hyped 1991 book, The Popcorn Report, written, not at all coincidentally, at the perigee of the Dinkins era in New York. Cocooning as a trend seemed to go a bit by the wayside after Rudy Giuliani began revitalizing New York law enforcement, and crime in general began to fall in the US during the Contract with America mid-1990s. I wonder if the post-Obama era will experience as quick a turnaround?

* AKA, Unexpectedly.

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