Zacks Investment Research upgraded shares of Yum China (NYSE:YUMC) from a sell rating to a hold rating in a research report sent to investors on Wednesday morning.
According to Zacks, “Shares of Yum China have underperformed its industry in the past year. Despite its earnings surpassing the Zacks Consensus Estimate in the second quarter of 2018, we are apprehensive of the company’s Pizza Hut sales trend in the recent quarters. Moreover, increased costs from labor, rent and operational initiatives hurt the company’s margins. Further, a lesser franchised business model remains a concern. Estimates for 2018 have remained unchanged over the past month, limiting upside potential for the stock. However, differentiated menu offerings across its restaurants and the enhanced focus on delivery system are the major top-line drivers. Continual expansion through unit openings also bodes well.”
YUMC has been the subject of several other reports. Bank of America downgraded Yum China from a neutral rating to an underperform rating and reduced their price objective for the company from $44.30 to $34.00 in a research note on Thursday, July 19th. Macquarie downgraded Yum China from an outperform rating to a neutral rating in a research note on Thursday, August 2nd. Oppenheimer reduced their price objective on Yum China from $45.00 to $40.00 and set an outperform rating for the company in a research note on Thursday, August 2nd. Finally, UBS Group downgraded Yum China from an outperform rating to a market perform rating in a research note on Friday, August 17th. One research analyst has rated the stock with a sell rating, four have assigned a hold rating and one has issued a buy rating to the company. Yum China currently has a consensus rating of Hold and an average target price of $42.50.
Yum China (NYSE:YUMC) last posted its earnings results on Wednesday, August 1st. The company reported $0.36 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.33 by $0.03. Yum China had a return on equity of 20.94% and a net margin of 6.45%. The business had revenue of $2.07 billion during the quarter, compared to the consensus estimate of $2.10 billion. During the same period in the previous year, the business earned $0.27 EPS. The business’s quarterly revenue was up 12.3% on a year-over-year basis. On average, equities research analysts expect that Yum China will post 1.51 EPS for the current year.
In other Yum China news, insider Angela Ai sold 4,529 shares of the company’s stock in a transaction that occurred on Friday, September 7th. The stock was sold at an average price of $38.25, for a total transaction of $173,234.25. Following the completion of the sale, the insider now directly owns 9,000 shares of the company’s stock, valued at approximately $344,250. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. 0.37% of the stock is owned by corporate insiders.
Hedge funds have recently modified their holdings of the company. Pinebridge Investments L.P. raised its stake in shares of Yum China by 79.2% during the 2nd quarter. Pinebridge Investments L.P. now owns 71,889 shares of the company’s stock worth $2,765,000 after buying an additional 31,766 shares in the last quarter. Genesis Asset Managers LLP purchased a new position in shares of Yum China during the 2nd quarter worth approximately $200,754,000. Commonwealth Bank of Australia raised its stake in shares of Yum China by 11.6% during the 2nd quarter. Commonwealth Bank of Australia now owns 40,333 shares of the company’s stock worth $1,545,000 after buying an additional 4,190 shares in the last quarter. Comerica Bank raised its stake in shares of Yum China by 9.0% during the 2nd quarter. Comerica Bank now owns 32,920 shares of the company’s stock worth $1,206,000 after buying an additional 2,709 shares in the last quarter. Finally, Bridgewater Associates LP purchased a new position in shares of Yum China during the 2nd quarter worth approximately $1,623,000. 82.87% of the stock is owned by institutional investors and hedge funds.
Yum China Company Profile
Yum China Holdings, Inc owns, operates, and franchises restaurants in China. The company operates in two segments, KFC and Pizza Hut. It operates restaurants under the KFC, Pizza Hut, Taco Bell, East Dawning, and Little Sheep brands, which specialize in chicken, pizza, hot pot cooking, Chinese food, and Mexican-style food categories.
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