Goldman Sachs Downgrades Yum! Brands (YUM) to Sell

Goldman Sachs downgraded Yum! Brands (NYSE: YUM) from Neutral to Sell citing China uncertainty and Taco Bell weakness.

The firm sees risk to China P&L, which is 40% of profits. Goldman said China SSS may slow by the 2nd-half as they have historically tracked with China GDP, which is showing signs of slowing. Moreover, food PPI and labor inflation in China have continued to increase, which will pressure margins.

The China issues come at a time when their survey indicates lingering brand damage to Taco Bell in the US.

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 $56.15 yesterday.

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