Based on information compiled by S&P Global Market Intelligence, restaurant chain operator Yum China Holdings‘ (NYSE: YUMC) inventory was an almost double-digit gainer this week. The corporate’s shares rose by 9% in worth throughout the interval, due in no small half to information of encouraging quarterly outcomes, and subsequent analyst worth goal will increase — and even a advice improve.
Enlargement program spurs top-line progress
Yum China’s constructive momentum kicked into gear Monday morning, and by no means actually let up. That morning it posted its third-quarter results, revealing that income rose by 5% yr over yr to $3.07 billion, whereas adjusted web earnings skilled a meatier enchancment with a 19% rise to $297 million ($0.77 per share). Each figures comfortably topped the consensus analyst estimates.
A lot of the advance derived from Yum China’s aggressive enlargement program. In the course of the quarter, the corporate lower the ribbon on over 400 new eating places in its system, and their income greater than mitigated a 3% decline in same-store sales. All advised, as of the top of September it had 15,861 eating places below its wing.
The corporate did not hesitate to say that it is being aggressive in returning capital to traders as nicely. It boosted its degree of share buybacks and stockholder dividends by nearly threefold to $1.24 billion.
From impartial to bullish
On the again of those pleasing figures, a number of analysts monitoring Yum inventory turned notably extra bullish on the corporate’s prospects. Taking the lead on this was JPMorgan Chase, which upgraded its advice to obese (purchase, in different phrases) from the earlier impartial. This was accompanied by a worth goal increase for the corporate’s Hong Kong-listed inventory to 60 Hong Kong {dollars} ($7.72), up from HK$35.50 ($4.57).
Based on experiences, the financial institution’s analyst Kevin Yin mentioned varied sectors of the Chinese language economic system have been consolidating, as a comparatively sluggish economic system knocks out smaller opponents. The comparatively highly effective Yum China ought to proceed to profit from the development.
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JPMorgan Chase is an promoting accomplice of Motley Idiot Cash. Eric Volkman has no place in any of the shares talked about. The Motley Idiot has positions in and recommends JPMorgan Chase. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
