Zacks Investment Research Downgrades Yum! Brands (YUM) to Hold

Yum! Brands (NYSE:YUM) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a note issued to investors on Monday, Zacks.com reports.

According to Zacks, “Shares of Yum! Brands have outperformed the industry in the past three months. We are encouraged by the company’s solid prospects despite the fact that it missed earnings estimates in the fourth quarter. Moreover, 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 and more efficient cost structure bode well. In an effort to enhance guest experience, the company has been focusing on deploying technology to more restaurants. Over the next three years, it expects to return an additional $6.5-$7 billion to its shareholders and predicts EPS of at least $3.75 in 2019. However, high costs of restaurant operations and soft sales due to refranchising are near-term concerns for the company. Estimates for current-quarter and year have been stable over the past 30 days.”

A number of other analysts have also recently issued reports on YUM. Goldman Sachs Group cut Yum! Brands from a “neutral” rating to a “sell” rating and dropped their price objective for the stock from $83.00 to $76.00 in a report on Friday, January 11th. BMO Capital Markets increased their price objective on Yum! Brands to $100.00 and gave the stock a “market perform” rating in a report on Friday, February 8th. JPMorgan Chase & Co. cut Yum! Brands from an “overweight” rating to a “neutral” rating and set a $94.00 price objective on the stock. in a report on Tuesday, March 19th. Mizuho cut Yum! Brands from a “buy” rating to a “neutral” rating and set a $84.00 price objective on the stock. in a report on Wednesday, March 20th. Finally, Citigroup dropped their price objective on Yum! Brands from $104.00 to $103.00 and set a “neutral” rating on the stock in a report on Thursday, April 4th. One investment analyst has rated the stock with a sell rating, ten have given a hold rating and six have issued a buy rating to the company’s stock. Yum! Brands presently has an average rating of “Hold” and a consensus target price of $95.21.

Shares of NYSE YUM traded down $0.05 during trading on Monday, reaching $103.27. 32,319 shares of the stock traded hands, compared to its average volume of 1,249,594. Yum! Brands has a 52-week low of $77.09 and a 52-week high of $103.43. The stock has a market capitalization of $31.53 billion, a PE ratio of 32.55, a P/E/G ratio of 2.13 and a beta of 0.55.

Yum! Brands (NYSE:YUM) last issued its quarterly earnings results on Thursday, February 7th. The restaurant operator reported $0.40 EPS for the quarter, missing analysts’ consensus estimates of $0.97 by ($0.57). The firm had revenue of $1.56 billion for the quarter, compared to analysts’ expectations of $1.57 billion. Yum! Brands had a net margin of 27.11% and a negative return on equity of 14.19%. The firm’s quarterly revenue was down 1.2% on a year-over-year basis. During the same period in the prior year, the company earned $0.96 EPS. As a group, research analysts forecast that Yum! Brands will post 3.81 earnings per share for the current fiscal year.

In other Yum! Brands news, CFO David W. Gibbs sold 1,531 shares of Yum! Brands stock in a transaction on Tuesday, March 19th. The stock was sold at an average price of $99.54, for a total transaction of $152,395.74. Following the completion of the transaction, the chief financial officer now owns 41,345 shares in the company, valued at $4,115,481.30. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Tanya L. Domier acquired 2,652 shares of the stock in a transaction on Friday, February 8th. The shares were bought at an average price of $94.23 per share, with a total value of $249,897.96. The disclosure for this purchase can be found here. In the last ninety days, insiders sold 98,922 shares of company stock worth $9,384,824. Insiders own 0.67% of the company’s stock.

Several institutional investors have recently bought and sold shares of YUM. Bank of New York Mellon Corp increased its position in Yum! Brands by 5.1% during the 3rd quarter. Bank of New York Mellon Corp now owns 5,459,185 shares of the restaurant operator’s stock worth $496,295,000 after purchasing an additional 264,177 shares in the last quarter. Advisors Asset Management Inc. lifted its stake in Yum! Brands by 14.6% during the 3rd quarter. Advisors Asset Management Inc. now owns 15,173 shares of the restaurant operator’s stock worth $1,379,000 after acquiring an additional 1,933 shares in the last quarter. AQR Capital Management LLC lifted its stake in Yum! Brands by 20.6% during the 3rd quarter. AQR Capital Management LLC now owns 255,818 shares of the restaurant operator’s stock worth $23,256,000 after acquiring an additional 43,748 shares in the last quarter. Koshinski Asset Management Inc. acquired a new position in Yum! Brands during the 3rd quarter worth about $462,000. Finally, Kentucky Retirement Systems acquired a new position in Yum! Brands during the 3rd quarter worth about $2,780,000. 75.01% of the stock is owned by institutional investors and hedge funds.

About Yum! Brands

YUM! Brands, Inc, together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. It operates in three segments: the KFC Division, the Pizza Hut Division, and the Taco Bell Division. The company operates restaurants under the KFC, Pizza Hut, and Taco Bell brands, which specialize in chicken, pizza, and Mexican-style food categories.

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