Oppenheimer Reiterates Outperform on Yum! Brands (YUM) - PT to $97
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Oppenheimer reiterated an Outperform rating on Yum! Brands (NYSE: YUM), and raised the price target to $97.00 (from $96.00). Once the remainder of the company's $6.2B buybacks is completed, YUM will have reduced its share count by ~17% since announcing the split. Oppenheimer is expecting YUM to report 3Q EPS of $1.11, vs. Street's $1.09 in its 10/5 release.
Analyst Brian Bittner commented, "YUM remains one of our favorite Outperforms, despite its 23% year-to-date gain. Our updated sum-of-parts "base-case" supports $97/sh heading into the October 31 separation. But, this does not incorporate additional potential upside from: 1) an attractive G&A opportunity our analysis supports, 2) potential for larger-thanexpected capital returns post-separation at both entities, 3) continued earnings power restoration at YUM-China. Weak domestic industry trends are extremely topical, yet New-YUM will derive ~60% of profits and 90%+ of unit growth outside the US."
Shares of Yum! Brands closed at $90.22 yesterday.
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