Yum! Brands (YUM) Stock Higher Ahead of Q2 Results

Yum! Brands (YUM) stock is increasing on Monday afternoon ahead of the company’s 2016 second quarter results due out after Wednesday’s market close.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Shares of Yum! Brands (YUM) - Get Report are gaining 0.75% to $86.41 early Monday afternoon ahead of the company's 2016 second quarter results due out after Wednesday's closing bell.

Wall Street is expecting the owner of KFC, Pizza Hut and Taco Bell to report earnings of 74 cents per share on revenue of $3.08 billion.

During the same quarter last year, the Louisville, KY-based company posted earnings of 69 cents per diluted share on revenue of $3.11 billion.

Deutsche Bank upped its price target on the stock to $83 from $81 and maintained its "hold" rating earlier today.

"The company is in the process of separating YUM into two businesses (core and China), but the process is still in progress, and we remain more interested in progress from across all divisions until YUM is closer to completion," the firm wrote in an analyst note.

Yum has been making strides on improving its operations and positioning across each of its brands, Deutsche Bank added.

KFC has refocused on its core products and bundled offerings, Pizza Hut has become more competitive on value and Taco Bell is working to straddle the line between offering "newness" and being a value player, according to the firm.

"We believe the level of industry-wide value and bundling offerings may negatively weigh on YUM results in the near-term as most product differentiation has been overshadowed by pricing promotions over the last few quarters," Deutsche Bank noted.

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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