Yum! Brands (YUM) Stock Continues to Gain on Q2 Earnings

Yum! Brands (YUM) stock is rising on Thursday afternoon after the restaurant company posted earnings that topped analysts’ estimates for the 2016 second quarter.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Shares of Yum! Brands (YUM) - Get Report are advancing 3.37% to $88.52 on heavy trading volume midday Thursday after the Louisville, KY-based company posted solid results for the 2016 second quarter.

After yesterday's closing bell, the parent company of KFC, Pizza Hut and Taco Bell reported earnings of 75 cents per share, beating analysts' expectations by one cent. Revenue came in at $3.01 billion, below Wall Street's estimates of $3.09 billion.

Same-store sales were flat for the company's China and Pizza Hut divisions, while KFC sales increased 2% and Taco Bell sales fell 1%.

Additionally, Yum expects its full-year core operating profit to increase at least 14% this year compared to its previous forecast for 12% growth.

Nomura raised its price target on the stock to $96 from $95 following the results.

"We reiterate our Buy rating on YUM, which remains our top large-cap restaurant stock pick. Given the resumption of positive same-store sales momentum in China in Q3, the encouraging words about the timing of the China spinoff, and the company's raised 2016 core operating profit target," the firm wrote in an analyst note.

About 6.85 million of the company's shares changed hands so far today compared to its average volume of 3.08 million shares per day.

Separately, TheStreet Ratings has a "Hold" rating with a score of C+ on the stock.

The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity and expanding profit margins.

But the team also finds weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: YUM

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