Oppenheimer reported on Monday that they have reduced their price target for restaurant company, Yum! Brands, Inc. (YUM).
The firm has reiterated its “Outperform” rating for YUM, but has reduced its price target from $82 to $74. This price target suggests a 10% increase from the stock’s current price of $66.69.
The price target made by the firm was a result of the recent guidance reduction that the company reported last week. YUM lowered their estimates due to a decline in expect growth in China. These estimates included a -6% drop in fourth quarter comps. The Chinese market accounts for 43% of YUM’s earnings.
Analysts see the company’s EPS increasing by 7% in 2013, down from the previously 10% growth expectation. An analyst from the firm noted, “while the China issues appear transitory, visibility into timing the rebound is low and the probability of a downward reset in ’13 EPS expectations appears high.”
Yum! Brands were mostly flat during Monday morning trading. The stock has increased 9% in the past year.
The Bottom Line
Shares of Yum Brands (YUM) have a 2.01% dividend yield, based on the latest intraday stock price of $66.81. The stock has technical support in the $62-$64 price area. If the shares can firm up, we see overhead resistance around the $68-$70 price levels.
Yum! Brands, Inc(YUM) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.