RBC Capital Downgrades Yum! Brands (YUM) to Outperform
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RBC Capital downgraded Yum! Brands (NYSE: YUM) from Top Pick to Outperform with a price target of $97, saying upside implied by their price target is more representative of an Outperform rating
Analyst David Palmer commented, "We continue to rank Yum Brands among our most favored names in our coverage universe. However, after having appreciated ~24% YTD and outperforming the S&P 500 and our coverage universe (market-cap weighted) by 17pp and 27pp, respectively, we believe the upside implied by our $97 target is more representative of an Outperform rating. We believe our $63 valuation of the New YUM is reasonable vs. a highly franchised peer group that currently trades on avg. 27x 2017E P/E and 16.5x EV/ EBITDA. To arrive at our $97 base case , we value Yum China at 10x EV/EBITDA '17E ($34/share), which we believe represents a compelling risk/reward."
Shares of Yum! Brands closed at $90.47 yesterday.
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Related EntitiesRBC Capital, Standard & Poor's, RBC Capital Top Pick
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