Market Overview

Credit Suisse Previews Yum's October 11 Investor Day

Share:
Credit Suisse Previews Yum's October 11 Investor Day
Related YUM
25 Stocks Moving In Monday's Pre-Market Session
A Peek Into The Markets: U.S. Stock Futures Gain Ahead Of Durable-Goods Orders Report

Credit Suisse issued a report detailing what to expect during YUM! Brands, Inc. (NYSE: YUM)'s investor day on October 11 and from "Yum China," the company's recent spin, which is set to begin trading on November 1.

Analyst Jason West raised Credit Suisse's price target for the company from $88 to $90 and maintains a Neutral rating based on the analysis of New Yum/China.

"Yum China screens reasonably cheap in light of improving trends and peer comparisons," said West. "However, we do not see enough upside vs. the current stock price to change our Neutral rating on YUM Brands at this time."

Related Link: RBC Downgrades Yum!, Says Stock Is No Longer A "Top Pick"

West sees a bull/bear case of $110/$75 for the stock.

On investor day, West said Yum is likely to focus on the company's growth outlook, with a focus on general and administrative (G&A) savings.

According to West, the current G&A franchise mix for New YUM! is around $25 thousand per restaurant and any $1 thousand in G&A savings per store should add about 2 percent in EBITDA.

"We doubt the company will significantly increase its target for franchise mix (currently 96 percent by YE17)," added West. "We note that consensus seems to be mismodeling G&A for 2017, though this appears related to franchise mix, not cost inefficiency."

At time of publication, Yum was trading slightly down on the day at $89.78, lower by just 0.08 percent.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for YUM

DateFirmActionFromTo
Jun 2017MizuhoInitiates Coverage OnNeutral
May 2017Argus ResearchUpgradesHoldBuy
May 2017Goldman SachsUpgradesSellNeutral

View More Analyst Ratings for YUM
View the Latest Analyst Ratings

Posted-In: Analyst Color News Emerging Markets Previews Restaurants Events Global Markets Best of Benzinga

 

Related Articles (YUM)

View Comments and Join the Discussion!