Morgan Stanley Comments On Yum! Brands Following Q2 Earnings

In reaction to Yum! Brands YUM second-quarter earnings release, Morgan Stanley analyst John Glass has slightly raised his 2014 EPS estimate to $3.70, but maintained his $4.20 estimate for 2015. Despite the slight increase, both of Glass's estimates remain below consensus.

For the second half of 2014, Glass has reduced his comp assumption from 7.5 percent to six percent and expects continued efficiencies in labor productivity, albeit to a lesser extent than the prior four quarters.

Glass also noted the firm estimates that consumer spending in China will triple within a decade. Considering nearly 45 percent of Yum's profits will come from the region by 2015, according to Glass, this could provide a welcomed boost in sales for the company.