Oppenheimer Reiterates Outperform on Yum! Brands (YUM) Following 3Q Report
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Oppenheimer reiterated an Outperform rating and $97.00 price target on Yum! Brands (NYSE: YUM) following the company's 3Q earnings report. Adjusted EPS was $1.09, compared to the Street's $1.10 estimate, as operating profits grew 11% globally. Comps at KFC (+4%) and TB (+3%) displayed a surprising beat and are outperforming a more sluggish industry trend.
Analyst Brian Bittner commented, "After an in-line earnings quarter, YUM's current stock price implies China's EBITDA fetches only sub-7x, based on our work. What's more intriguing is the franchised exChina business displayed an impressive SSS acceleration, grew operating profits double-digits and still has a unique G&A and capital return opportunity in front of it. China comps were slightly negative in 3Q, but mgmt's press release commentary suggests improving trends in Aug./Sept. We would be aggressive buyers below $90."
Shares of Yum! Brands closed at $88.62 yesterday.
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