The analyst firm raised its 2015 EPS estimates for the company to $3.52 a share from its previous estimates of $3.50 a share. RBC also raised its 2016 earnings estimates for Yum! Brands to $4.22 a share from its previous estimate of $4.20 a share.
"Following our meetings with management we take the opportunity to review our earnings and price target," analyst David Palmer wrote. "Our higher target largely reflects the impact of a China business recovery on EPS and the multiple. Our new upside scenario partially reflects a China spin/licensing and our new downside scenario includes the unlikely event of a third supply chain issue in the last three years."
Separately, TheStreet Ratings team rates YUM BRANDS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate YUM BRANDS INC (YUM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."