Deutsche Bank Cuts Price Target on Yum! Brands (YUM) as China Slumps

November 30, 2012 7:23 AM EST Send to a Friend
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Price: $76.29 --0%

Rating Summary:
    14 Buy, 10 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 6 | Down: 11 | New: 20
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Yesterday Yum! Brands (NYSE: YUM) provided updated 2012 guidance, and 2013 guidance that called for at least 10 percent EPS growth in 2013. It also announced China same-store-sales were weak.

Commenting on the developments, analysts Jason West of Deutsche Bank said, "China SSS decelerated sharply post the update provided on the 3Q call (Oct. 10). YUM now expects China SSS of -4% for 4Q12, down from flat to slightly positive previously."

"We believe the deceleration was primarily driven by weaker traffic and was broad-based across brands and geographies. The revised guidance suggests China SSS are likely closer to -6% more recently, based on our math,"

Deutsche Bank trimmed its Q4 and 2012 EPS estimates on YUM to $0.81/$3.24 from $0.83/$3.25. 2013 EPS estimates were cut to $3.59 from $3.72.

Deutsche Bank maintained a Hold rating on YUM and cut its price target to $66.00 (from $69.00).

For an analyst ratings summary and ratings history on Yum! Brands (NYSE: YUM) click here. For more ratings news on Yum! Brands click here.

Shares of Yum! Brands closed at $74.47 yesterday.


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