Cramer: Yum! Brands 'Certainly Lets McDonald's Look A Lot Better'

Yum! Brands, Inc. YUM fell drastically after the company announced cutting its profit forecast for the year 2014.

In notes to clients, the company informed shareholders that its EPS will rise by a mid-single-digit percentage (excluding some items), which is significantly lower than the 20 percent growth it forecasted in July of this year.

While the Street is speculating whether Yum! Brands will spin off, Jim Cramer recently provided his perspective on CNBC.

Related Link: Goldman Sachs Sees Structural Concerns Over Yum! Brands

Other Factors At Play

Cramer mentioned the retirement of David Novak and contemplated who will step in: "It’s probably going to be Greg Creed -- now he is from Taco Bell, which has put up some good numbers. He also dealt with the 2006 E.Coli scare very well. A lot of people feel that he is going to come in break up the company into Taco Bell, Pizza Hut and KFC and then break out China."

Cramer verbalized his doubts about the potential break up and said, "My understanding [...] it's definitely not going to occur. So, those who are buying it for that, be very careful."

McDonald's On The Up And Up?

"The numbers that we hear this morning do imply a 20 percent same stores declining in Q4 in China; that is disastrous,” Cramer commented. “It certainly lets McDonald's look a lot better."

The Crux Of The Issue

"Now here is the problem with all of this: When you sit back and you look at what analysts say, does anybody come other than CLSA? No one really downgrades," Cramer concluded.

"The stock has bottomed $69-70 almost each time and it has bottomed on the break-up analysis."

Yum! Brands recently traded at $71.75, down 4.6 percent.

Image credit: Mike Mozart, Flickr