YUM! Brands, Inc. (YUM) Analysts’ Calls on YUM Stock Conflict

Analysts at Goldman cut their rating on shares of YUM! Brands, Inc. (NYSE:YUM) from Neutral to Sell in their opinion released on January 11. Analysts at Evercore ISI downgraded the stock to a In-line call from its previous Outperform stance, in a research note that dated back to October 18.

By watching the trading activity of corporate insiders, it will become easier to get a sense of YUM! Brands, Inc. (NYSE:YUM)’s prospects. The earliest insider trade took place on 02/08/2019. Domier Tanya L gathered a total of 2.65 thousand shares of company at average share price of $94.23. The total for the purchase was set at $249.9 thousand. After this transaction, the Director account balance stood at 2.65 thousand shares. The stock lost -1.03 percent since that insider purchase. On 02/08/2019, Gibbs David W, President, CFO, sold 19.44 thousand shares at a price per share of $94.06. This removed 1.83 million shares from the insider’s fortune and the stock saw a -0.85 percent retreat in value since the news became public. This transaction left 39.35 thousand shares in the President, CFO account. On 01/15/2019, CEO, KFC Division Lowings Anthony performed a sale transaction worth $259.81 thousand. This sale at $89.93 each has eliminated 2.89 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 3.7 percent increase since the transaction was reported. The insider now is left with 33.64 thousand shares remaining in the account. Gibbs David W, who performs the President, CFO job, sold 6.41 thousand shares for $576.45 thousand. The disposal occurred on 01/15/2019 was priced at $89.93 per share. The share price soared 3.7 percent since the reporting date. Gibbs David W now left with a stake of 39.35 thousand YUM stock worth $3.67 million after the insider selling.

YUM! Brands, Inc. (YUM) is expected to jump by 1.92 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $106 price as 12-month high target. This represents a whopping 13.66 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $98, which represents a return potential of 5.08 percent when compared to the closing price of the stock of $93.26 on Monday, February 11. The lowest price target for the stock is $76 — slightly more than -18.51 percent from YUM’s current share price.

The shares are currently floating around the first support level of $92.58. Below this, the next support is placed in the zone of $91.89. Till the time, the YUM stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 53.72 on daily chart, which may remain a cause for concern. If the price breaks below $91.89 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $94.5 mark may result into a pull-back move towards $95.73 level.

YUM shares dropped -1.23 points or -1.3 percent on Monday to $93.26 with a heavy trade volume of 2.436 million shares. After opening the session at $94.43, the shares went as high as $95.05 and as low as $93.13, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $29.2 billion and now has 312.7 million shares outstanding. YUM! Brands, Inc. (YUM) stock has gained 1.6 percent of market value in 21 trading days.

YUM stock has a trailing 3-year beta of 0.55, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $4.48 a share in the trailing twelve months. The stock’s value has surged 1.46 percent year to date (YTD) against a rise of 22.23 percent in 12 month’s time. The company’s shares still trade -2.29 percent away from its 1-year high of $95.45 and 22.2 percent up from 52-week low of $76.32. The average consensus rating on the company is 2.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of YUM! Brands, Inc. (YUM) are trading at a P/E ratio of 21.08 times earnings reported for the past 12 months. The industry YUM operates in has an average P/E of 60.98. Its P/E ratio went as low as 16.33X and as high as 25.18 over the 5-year span. Further, it is sporting a 5.13 on the Price-to-Sales ratio. Compare this with the industry average P/S of 3.18. 53.3 percent is the gross profit margin for YUM! Brands, Inc. and operating margin sits at 0 percent. Along with this, the net profit margin is 0 percent.

YUM will be showing off its Q1 earnings on April 23. Analysts are forecasting revenue to climb 0.8 percent to $1.59B in the next fiscal quarter, while earnings are seen soaring by nearly -1.04 percent to $0.95 per share. History has shown that shares in YUM! Brands, Inc. have gone up on 18 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.04 per share, better than the $0.83, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.56B, worse than the $1.59B analysts expected. Earnings are estimated to increase by 96.4 percent this year, 10.7 percent next year and continue to increase by 15.8 percent annually for the next 5 years.