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Janney Montgomery Scott Initiates Coverage on Yum! Brands (YUM) with a Buy; Meaningful Growth Opportunities in China

November 4, 2009 9:28 AM EST
YUM Hot Sheet
Rating Summary:
    7 Buy, 2 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 7 | New: 23
Janney Montgomery Scott initiates coverage on Yum! Brands, Inc. (NYSE: YUM) with a Buy rating. Price target $40.

Janney analyst says, "Our fair value estimate for the shares is $40, about 21% above the November 2 closing price of $33.12. Yum Brands offers investors meaningful growth opportunities outside of the United States, most notably so in mainland China. We look for 40% or more of the company's operating profits to be generated in the fast-growing market by 2013. Also, the company's corporate culture with its emphasis on recognizing achievement appears underappreciated by the Street. This culture may help explain Yum Brands enviable track record of at least 10% EPS growth in each of the last several years. At present, we view these positives as not being fully baked into the stock, which presently changes hands at about the same P/E (on 2010E EPS and 2011E EPS) as its quick-service restaurant peers on average."

To see more analyst ratings on YUM Click Here.

Yum! Brands, Inc. operates as a quick service restaurant company.

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