Yum! Is Cheap Compared to Peers, First Global Says

On Thursday, First Global upgraded shares of Yum! Brands

from Market Perform to Outperform. Analyst Rajiv Ghosh believes Yum! is “poised to report a strong CAGR of 20% in the EPS over the next two years, marking a rebound from the decline of 9% in its EPS before special items in CY13, as confidence in the company's food safety returns in the most important Chinese market and the growth characteristics of its franchisee is reflected in higher sales and unit growth across the world.” Ghosh believes Yum! is cheap because the stock trades “at a discount of 14% to its peers on a P/E multiple basis and at a discount of 12% to its peers on a EV/EBIDTA multiple basis.” Shares of Yum! are up 0.93 percent to $74.89. The stock has been stuck in a range of $65 to $75 the past two years.