UPDATE: YUM Brands Downgraded by Morgan Stanley on Slow China Sales

In a report published Thursday morning, Morgan Stanley analyst John Glass adjusted

rating, downgrading it to Equal-weight, also moving price target from $82 to $77. The report noted, "While we still see YUM as a best-in-class play on emerging market consumers, we see risk to the company's ambitious goals for a 40% profit recovery in China in '14. It's not that this cannot happen, but we think the market is already discounting that it will happen (current consensus is calling for 24% increase in 14 EPS, above guidance of 20%)." Glass highlighted potential reasons from the China slowdown included macro pressures from weakened consumer confidence, rapid unit expansion leading to some overlap, and possibly pricing increases. YUM previously closed at $76.53 Wednesday and opened Thursday down to the $74.91 level.