Buckingham Research Downgrades YUM! Brands (YUM) to Neutral

August 14, 2008 10:49 AM EDT

Buckingham Research downgrades YUM! Brands (NYSE: YUM) from Accumulate to Neutral.

Buckingham analyst says, "Downgrading shares from Accumulate to Neutral as the shares are too close to our $38 target price to warrant purchase, & at this juncture, we do not think it is prudent to raise the target by stretching the multiple. We highlight that the shares are up ~12% from trough levels following low quality results about 1 month ago, & are now trading at ~19x our forward EPS estimate; this is a premium to multinational peers McDonald's (NYSE: MCD) (~17x) & Burger King (NYSE: BKC) (~18x), both of which should generate stronger & higher quality EPS growth in 2H08...We look for the shares to trade in a $34-$40 range through year end or 17-20x forward EPS , leading us to a Neutral rating."

YUM! Brands, Inc. (YUM) is a quick service restaurant (QSR) with over 35,000 units in more than 100 countries and territories. Through the five concepts of KFC, Pizza Hut, Taco Bell, LJS and A&W (the Concepts), the Company develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of food items.

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