Nomura Cuts Yum EPS Forecast On China 'Concerns'

Yum! Brands, Inc.

received a lowered Q1 2016 EPS estimate by Nomura analysts on Monday, ahead of the worldwide restaurant chain's December sales release scheduled for Tuesday. Nomura issued a Buy rating with a $82 price target on Monday, reducing its 1Q16 EPS forecast due to concerns with recent stock-market volatility in China. Shares of YUM are currently trading 1 percent higher. Analysts at the firm's China division same-store sales forecast for Q1 2016 went from +2 percent to 0 percent, and lowered their EPS estimate for that quarter by $0.02, to $0.83, according to the research report released Monday. However, Nomura had raised their Q4 2016 EPS estimate for the world's largest restaurant operator by $0.10, to $0.80, given that the company has plans to likely return $6.2bn to shareholders. Nomura raised their FY16E EPS estimate from $3.40 to $3.48. "The net effect is to raise our full-year 2016 EPS projection to $3.48. Also, given the lower amount of diluted shares now incorporated into our model for the end of 2016 and on into 2017, we raise our full-year 2017 EPS estimate," the firm commented. Yum! Brands presently has a 52 week low of $66.35 and a 52 week high of $95.90. The company's has a 50 day moving average of $72.04 and a 200 day moving average of $80.80. YUM has a market cap of $31.71 billion and a P/E ratio of 35.14. Yum last released its earnings results on Tuesday, October 6th.