Zacks Investment Research Lowers Yum! Brands, Inc. (NYSE:YUM) to Sell

Zacks Investment Research cut shares of Yum! Brands, Inc. (NYSE:YUM) from a hold rating to a sell rating in a research report sent to investors on Tuesday, October 17th.

According to Zacks, “Yum! Brands has performed relatively well in the domestic and many key international markets. Following China business spin-off, Yum! Brands’ endeavors to drive growth by employing greater focus on the development of its three iconic global brands, increasing its franchise ownership, and creating a leaner, more efficient cost structure, bode well. In fact, its shares have also outpaced the industry ever since the separation. However, Yum! Brands is exposed to various emerging nations in Latin America that have been exhibiting decelerating growth due to various macro headwinds. A soft consumer spending environment in the U.S. restaurants space is another concern. Again, continual underperformance of the Pizza Hut U.S. division, macroeconomic concerns coupled with negative currency translation raises concern.”

YUM has been the subject of several other reports. CIBC upped their target price on shares of Yum! Brands from $80.00 to $85.00 and gave the company an outperform rating in a research note on Friday, September 8th. Robert W. Baird restated a hold rating and issued a $78.00 target price on shares of Yum! Brands in a research note on Thursday, October 12th. BidaskClub upgraded shares of Yum! Brands from a buy rating to a strong-buy rating in a research note on Saturday, June 24th. Cowen and Company restated a buy rating and issued a $85.00 target price on shares of Yum! Brands in a research note on Friday, September 8th. Finally, BMO Capital Markets upped their target price on shares of Yum! Brands from $66.00 to $77.00 and gave the company a market perform rating in a research note on Thursday, August 3rd. Twelve equities research analysts have rated the stock with a hold rating, twelve have issued a buy rating and one has given a strong buy rating to the company’s stock. The stock presently has a consensus rating of Buy and a consensus target price of $80.95.

Shares of Yum! Brands (NYSE:YUM) traded up $0.96 during midday trading on Tuesday, hitting $79.87. 693,403 shares of the company’s stock traded hands, compared to its average volume of 1,863,263. Yum! Brands has a 12 month low of $59.57 and a 12 month high of $80.66. The stock has a market capitalization of $27,206.06, a P/E ratio of 28.18, a PEG ratio of 2.40 and a beta of 0.86. The company has a quick ratio of 1.41, a current ratio of 1.42 and a debt-to-equity ratio of -1.55.

Yum! Brands (NYSE:YUM) last released its quarterly earnings data on Thursday, November 2nd. The restaurant operator reported $0.68 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.67 by $0.01. Yum! Brands had a net margin of 18.51% and a negative return on equity of 17.19%. The company had revenue of $1.44 billion during the quarter, compared to analyst estimates of $1.39 billion. During the same quarter in the prior year, the business earned $1.09 earnings per share. The business’s quarterly revenue was down 5.4% compared to the same quarter last year. equities research analysts expect that Yum! Brands will post 2.8 earnings per share for the current fiscal year.

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The business also recently declared a quarterly dividend, which will be paid on Friday, December 8th. Investors of record on Wednesday, November 15th will be issued a dividend of $0.30 per share. This represents a $1.20 annualized dividend and a dividend yield of 1.50%. The ex-dividend date of this dividend is Tuesday, November 14th. Yum! Brands’s dividend payout ratio is currently 37.04%.

In related news, CFO David W. Gibbs sold 8,336 shares of the firm’s stock in a transaction that occurred on Wednesday, August 9th. The shares were sold at an average price of $74.00, for a total transaction of $616,864.00. Following the transaction, the chief financial officer now owns 39,664 shares of the company’s stock, valued at $2,935,136. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Company insiders own 0.65% of the company’s stock.

Large investors have recently added to or reduced their stakes in the company. Principal Financial Group Inc. raised its position in shares of Yum! Brands by 1.0% in the second quarter. Principal Financial Group Inc. now owns 985,546 shares of the restaurant operator’s stock valued at $72,694,000 after purchasing an additional 9,754 shares during the period. Teachers Advisors LLC grew its stake in shares of Yum! Brands by 25.7% in the second quarter. Teachers Advisors LLC now owns 556,212 shares of the restaurant operator’s stock worth $41,026,000 after acquiring an additional 113,582 shares during the last quarter. Whalerock Point Partners LLC grew its stake in shares of Yum! Brands by 3.0% in the second quarter. Whalerock Point Partners LLC now owns 8,500 shares of the restaurant operator’s stock worth $627,000 after acquiring an additional 250 shares during the last quarter. Delta Lloyd Asset Management N.V. acquired a new stake in shares of Yum! Brands in the second quarter worth $13,136,000. Finally, Bank of Montreal Can grew its stake in shares of Yum! Brands by 81.5% in the second quarter. Bank of Montreal Can now owns 754,879 shares of the restaurant operator’s stock worth $55,679,000 after acquiring an additional 338,941 shares during the last quarter. 72.15% of the stock is currently owned by institutional investors.

Yum! Brands Company Profile

YUM! Brands, Inc is engaged in restaurant business. As of December 31, 2016, the Company operated or franchised over 43,500 restaurants in more than 135 countries and territories operating under the KFC, Pizza Hut or Taco Bell (collectively the Concepts) brands. The Company operates through three segments: The KFC Division, which includes the operations of the KFC concept around the world; The Pizza Hut Division, which includes the operations of the Pizza Hut concept around the world, and The Taco Bell Division, which includes the operations of the Taco Bell concept around the world.

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