UPDATE: Goldman Sachs Downgrades Yum! Brands (YUM) to Neutral on China SSS Plunge
(Updated - February 5, 2013 1:09 PM EST)
Goldman Sachs downgraded Yum! Brands (NYSE: YUM) from Buy to Neutral following today's conference call following Q4 results and weak China SSS results. The firm lowered its price target from $77 to $63.
The downgrade comes following the poor SSS in China. Goldman's recent upgrade had been based on the thesis that China's macro was stabilizing, but that was before the China chicken supply issue. While Goldman thought the issue would delay, but not derail China, it turns out that the negative SSS impact is "much greater than we anticipated."
Goldman cut 2013-2014 EPS estimates to $2.94/$3.50 from $3.67/$4.34 and introduced 2015 EPS of $4.07. The firm new 2013 EPS estimates represents a 10% EPS decline, which is worse than the company projection of "down mid-single digit." Goldman said the potential for further negative revisions later this year factors into their downgrade.
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 $63.94 yesterday, with a 52 week range of $61.05-$74.75.
Goldman Sachs downgraded Yum! Brands (NYSE: YUM) from Buy to Neutral following today's conference call following Q4 results and weak China SSS results. The firm lowered its price target from $77 to $63.
The downgrade comes following the poor SSS in China. Goldman's recent upgrade had been based on the thesis that China's macro was stabilizing, but that was before the China chicken supply issue. While Goldman thought the issue would delay, but not derail China, it turns out that the negative SSS impact is "much greater than we anticipated."
Goldman cut 2013-2014 EPS estimates to $2.94/$3.50 from $3.67/$4.34 and introduced 2015 EPS of $4.07. The firm new 2013 EPS estimates represents a 10% EPS decline, which is worse than the company projection of "down mid-single digit." Goldman said the potential for further negative revisions later this year factors into their downgrade.
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 $63.94 yesterday, with a 52 week range of $61.05-$74.75.