Jefferies Comments on Yum! Brands (YUM) Following Q3 Results
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Price: $150.87 -0.96%
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Rating Summary:
19 Buy, 23 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is reaffirming its Hold rating and $55 price target on shares of Yum! Brands (NYSE: YUM) following its third quarter results.
The company released its third quarter results relatively inline with expectations, but did top same store sales expectations in China with 19 percent, well ahead of the firm's 12 percent estimate and the consensus of 14 percent.
The firm reports that operating profit was flat during the quarter as rising food costs increased cost of goods sold by 200 bps in the U.S. and by 270 bps in China. Jefferies notes that while same store sales beat expectations, operating profit growth in China was only 7 percent, well below the firm's estimate of 17 percent.
Following the company's third quarter results and reiterated guidance, Jefferies is maintaining its 2011 and 2012 EPS estimates of $2.83 and $3.12. The firm raised its revenue estimates for the two years slightly to $12.497 billion and $13.287 billion.
An analyst at Jefferies comments, "We find YUM attractive for its global growth, but valuation already considers stronger China growth."
For more ratings news on Yum! Brands click here and for the rating history of Yum! Brands click here.
Shares of Yum! Brands closed at $49.44 yesterday.
The company released its third quarter results relatively inline with expectations, but did top same store sales expectations in China with 19 percent, well ahead of the firm's 12 percent estimate and the consensus of 14 percent.
The firm reports that operating profit was flat during the quarter as rising food costs increased cost of goods sold by 200 bps in the U.S. and by 270 bps in China. Jefferies notes that while same store sales beat expectations, operating profit growth in China was only 7 percent, well below the firm's estimate of 17 percent.
Following the company's third quarter results and reiterated guidance, Jefferies is maintaining its 2011 and 2012 EPS estimates of $2.83 and $3.12. The firm raised its revenue estimates for the two years slightly to $12.497 billion and $13.287 billion.
An analyst at Jefferies comments, "We find YUM attractive for its global growth, but valuation already considers stronger China growth."
For more ratings news on Yum! Brands click here and for the rating history of Yum! Brands click here.
Shares of Yum! Brands closed at $49.44 yesterday.
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