Yum! Brands Inc. (NYSE: YUM) is scheduled to report its third-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for $1.07 in EPS on $3.68 billion in revenue. In the same period of the previous year, the restaurant operator posted EPS of $0.87 and revenue of $3.35 billion.
This stock has traded down since late May. Yum is famous for the company’s Taco Bell, Kentucky Fried Chicken (KFC) and Pizza Hut brands. While the domestic U.S. business has been very solid for the most part, especially at the Taco Bell restaurants, the company has experienced numerous issues in China. As of last summer, the company had a total of 6,387 restaurant units, or 15% of the total system restaurants in China. Most of the restaurants were KFC, which had 4,653 units. That was followed by Pizza Hut with 1,349 units.
Many on Wall Street feel that the company could announce the separation of the operations in China when it holds its analysts day in December. China has continued to be a thorn in the Yum Brands overall corporate performance, and investors may be very open to the split.
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Ahead of its earnings, a few analysts weighed in:
- Nomura initiated coverage of the stock with a Buy rating and a $106 price target.
- RBC reiterated a $103 price target for Yum.
- Credit Suisse reiterated an Underperform rating with an $86 price target.
- Citigroup reiterated a Neutral rating with a $93 price target.
- JPMorgan reiterated an Overweight rating.
- Oppenheimer reiterated an Outperform rating with a $105 price target.
So far in 2015, Yum has outperformed the broad markets, with the stock up nearly 16% year to date, as well as up over 18% in the past 52 weeks.
Keep in mind that Yum’s earnings reports can be very complex, compared to what most might be used to. 24/7 Wall St. will have a summary of this report after the markets close on Tuesday.
Shares of Yum were down 0.5% to $82.62 Tuesday morning. The stock has a consensus analyst price target of $94.78 and a 52-week trading range of $65.81 to $95.90.
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