BTIG Affirms Yum! Brands (YUM) at 'Neutral'; Says Yum China Stake Sale Valuation Below Expectations
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BTIG affirms Yum! Brands (NYSE: YUM) with a Neutral rating following news that it would sell a portion of Yum China today.
Analyst Peter Saleh commented today,
We remain Neutral rated on Yum! as the initial minority investment in the China division values the segment at ~$8B-$10B, below the $12B-$14B we believe is necessary to support the current multiple. With that said, we expect significant share repurchase leading up to the separation on October 31st to continue to support the share price. Looking ahead, we believe Yum! can sustain ~10% EPS growth on a consistent basis, including in 2017 despite lapping the extra week, but don’t see enough upside to become more positive.
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