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Oppenheimer Starts Yum! Brands (YUM) at Outperform, Sees More Upside

March 19, 2012 7:53 AM EDT Send to a Friend
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Price: $72.43 --0%

Rating Summary:
    13 Buy, 11 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 11 | Down: 6 | New: 26
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Oppenheimer initiates coverage on Yum! Brands (NYSE: YUM) with a Outperform rating and $82 price target.

Despite the 43% move higher since October 2011, the firm's analysis suggests incremental upside to both earnings and valuation.

"We are attracted to the unique business model that continues to shift toward emerging economies (now 60% of profits) which boosts ROIC and could extend the double-digit earnings runway for several years," the analyst said. "Importantly, company-specific tailwinds in China (~45% of profits) are powerful and appear uncorrelated to slowing GDP. The reliable free cash flow stream could generate well over $1 billion in 2012 and lead to earnings-accretive share buybacks and double-digit dividend raises."
For an analyst ratings summary and ratings history on Yum! Brands click here. For more ratings news on Yum! Brands click here.

Shares of Yum! Brands closed at $68.40 yesterday.




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