We cut our 12-month target price by $18 to $92, 27.1x our 2022 EPS estimate (cut $0.24 to $3.39), near PZZA's five- and ten-year average multiples of 27.9x and 26.5x, respectively, and a premium to the recent restaurant peer average of 24.3x next-12-month earnings. We cut our 2023 EPS estimate $0.17 to $4.01 and expect lower near-term growth than before. We see sales growth of 4.1% in 2022 and 6.1% in 2023, near the low end of our previous estimates. We expect EBIT margins of 7.9% for both Q2 earnings (early August) and overall 2022 results, a decline from 8.8% in 2021, largely resulting from commodity inflation and staffing challenges. Though we see less near-term upside, we think PZZA's longer-term earnings growth potential from its ongoing international expansion supports its peer-premium valuation. We also look favorably on PZZA's commitment to sales growth through digital channels and other technologies (i.e., Doordash, Papa Call, and Papa Rewards).
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