Yum! Brands, Inc. Analyst Roundup

Analysts covering Yum! Brands, Inc. YUM expressed concern over declines in China and a lack of clarity from management.  Stifel was the most bullish on the company.

Bank of America Merrill Lynch - Neutral, $75 Price Target

“The severe China same store sales decline had a pronounced impact on margins which declined 460 bps to 14.9 percent, well below our 18.3 percent estimate. We attribute part of the margin decline to the lap of significant productivity savings in 2013 with minimal excess costs remaining to cut...Similar to the 2013 antibiotic issue, Yum predicts this year’s supplier issue will pressure China same store sales for six to nine months.”

Jefferies - Hold, $71 Price Target

“-14 percent China SSS missed (preliminary 13 percent), driving margin declines and muting EPS growth (+3 percent to $0.87 vs cons $0.89). Though trends are improving, 4Q SSS still negative and management lowered 2014 guidance to +6-10 percent EPS growth vs. at least 20 percent previously.  No details on 2015 yet and we think management’s visibility on a turn is low.”

Stifel - Buy, $105 Price Target

"We are uncertain in how long the current China same-store-sales slump will last; however, the bottom line is that YUM China remains one of the best retail businesses on the globe, representing a five-fold unit-growth opportunity."

Wells Fargo - Market Perform, $70-$74 Valuation Range

“We remain on the sidelines given YUM's still-healthy valuation and a lack of clarity with the pace of both a SSS and margin recovery with the China segment. We are lowering our 2014E EPS to $3.25 from $3.26 and 2015E EPS to $3.78 from $3.91.”

Yum! Brands, Inc. closed at $70.74 Wednesday, up 1.45 percent.