Papa John's shares rose more than 4 percent on Wednesday after the company boosted its forecast for 2016 following a strong earnings beat.
The pizza restaurant chain now expects North American comparable sales to rise in the range of 3 percent to 5 percent this year. Previously, Papa John's projected growth of 2 percent to 4 percent.
In addition, the company raised its earnings per share guidance to a range of $2.35 to $2.45, up from a range $2.30 to $2.40.
According to Thomson Reuters, analysts on average are expecting the company to earn $2.42 a share this year.
"Our strong digital platform, unwavering commitment to quality, and consistent, disciplined approach to growing our global footprint have us well-positioned to maintain our momentum throughout 2016 and well into the future," John Schnatter, CEO of Papa John's Pizza, said in a statement.
Papa John's posted second-quarter earnings of 61 cents a share on revenue of $423 million on Tuesday, outpacing Wall Street's estimated earnings of 54 cents a share on $415 million in revenue, according to a consensus estimate from Thomson Reuters.
"We attribute the solid North American same-store sales showing in Q2 to multiple factors, including: (1) product quality, (2) operational execution, (3) effective marketing, (4) the Papa Rewards loyalty program, and (5) the continuing benefits from the ongoing transition in which pizza-loving consumers increasingly order pizza delivery via digital means (as opposed to telephone ordering)," Nomura analyst Mark Kalinowski wrote in a research note Wednesday.
Kalinowski maintained his "neutral" rating on the stock, but bumped his target price to $75 from $70 following Papa John's earnings report.
KeyBanc analyst Chris O'Cull reiterated his target price of $80, which is well above the consensus of $71, in his research note on Tuesday. Although, he said, competitors' promotions and pricing decisions, weaker consumer spending and rising cheese and meat prices could act as headwinds and prevent the stock from reaching his $80 projection.