Yum! Brands’ downgrade

Mizuho downgraded Yum! Brands (YUM) from “neutral” to “underperform” while keeping its 12-month price unchanged at $84, which represents a fall of 15.4% from its March 19 closing price of $99.20.

Mizuho Downgrades Yum! Brands from ‘Neutral’ to ‘Underperform’

Other analysts’ recommendations

Of the total 22 analysts who follow Yum! Brands (YUM), 36.4% have given the stock a “buy” rating while 54.5% say “hold” and 9.1% say “sell.” Analysts have set a 12-month average price target of $97.65, which implies a fall of 1.6% from the March 19 closing price.

After Yum! Brands posted its fourth-quarter earnings on February 7, Cowen and Company and BMO raised their price targets while J.P. Morgan downgraded the stock. Cowen and Company had increased its price target from $100 to $105 while BMO raised its price target from $88 to $100. On March 19, J.P. Morgan downgraded the stock from “overweight” to “neutral.”

Peer comparisons

Of the total 22 analysts who follow Domino’s Pizza (DPZ), 68.2% recommend a “buy” while the remaining 31.8% favor a “hold.” Analysts have given an average 12-month price target of $289.70 for the stock, which provides an upside potential of 16.5% from its price of $248.76.

Of the seven analysts who follow Papa John’s (PZZA), 57.1% say “buy” while 28.6% say “hold” and 14.3% say “sell.” Analysts have an average 12-month price target of $50.0 for the stock, which represents a potential upside of 6.4% from its price of $46.98.

Analysts’ estimates

For 2019, analysts expect Yum! Brands to post adjusted EPS of $3.82, which represents a rise of 20.4% from $3.17 in 2018. The expansion of the company’s EBIT margin and share repurchases are expected to drive the company’s EPS in 2019 while the decline in revenue is expected to offset some of the increase in EPS.

Next in this series, we’ll look at Yum! Brands’ stock performance.

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