Friday April 24, 2020, 00:00:00
By Mark Kalinowski
With this report, we change our rating on Yum Brands (YUM; $85.61) to Neutral (from Buy). This change largely reflects the following factors: (1) currencies that may work against Yum’s earnings over the remainder of 2020, (2) other costs that may creep up in Q2, (3) the possibility of store closures hurting Q2 by more than the Street anticipates, (4) possible same-store sales issues at Taco Bell, and (5) YUM shares’ +55% rise off of its 52-week low, which has allowed it to come within less than 50 cents of our $86 target price (which we now move to “NA” with this report. We note the following:
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Thursday March 26, 2020, 00:00:00
By Mark Kalinowski
We lower our worldwide aggregate same-store sales estimates for Yum Brands (YUM; Buy) as follows:
Q1E 2020: down by -8 percentage points to -8%
Q2E 2020: down by -23 percentage points to -23%
Q3E 2020: down by -15 percentage points to -13%
Q4E 2020: down by -7 percentage points to -5%
Full-year 2020E: down by -14 percentage points to -13%
Full-year 2021E: up by +5 percentage points to +7%
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Thursday February 6, 2020, 00:00:00
By Mark Kalinowski
Earlier today, Yum Brands (YUM; Buy) reported adjusted Q4 EPS of $1.00 — which included a -$0.05 hit related to the mark-to-market adjustment for Yum’s investment in Grubhub (GRUB; Not Rated). Excluding this GRUB-related adjustment, adjusted EPS would have been $1.05 — still short of our $1.14 forecast and $1.13 sell-side consensus (according to Consensus Metrix).
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