"The LT model remains intact, but YUM clarified '15 EPS guide excludes operating profit growth in KFC China given low visibility," analysts said about the quick service restaurant company after its Investor and Analyst Conference yesterday.
"1H China SSS will be down, but management sees a turnaround as KFC drives menu innovation, a more localized strategy and increases franchising," analysts noted.
"While YUM is moving in the right direction, we suspect investors may be disappointed by the lack of strategic/balance sheet actions. We estimate '14/15/16 EPS of $3.10/$3.48/$4 (from $3.20/$3.62/NE)," analysts added.
Separately, TheStreet Ratings team rates YUM BRANDS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate YUM BRANDS INC (YUM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, impressive record of earnings per share growth, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."