Analysts Stay Positive on Yum China (YUMC)

Yum China Holdings, Inc. (NYSE:YUMC) is one of the 13 Best Fast Food Stocks to Buy. On December 16, TipRanks reported that Daiwa reiterated its Buy rating on Yum China Holdings, Inc. (NYSE:YUMC) with a price target of HK$450.

Previously, on November 25, CLSA slightly cut its price target on Yum China Holdings, Inc. (NYSE:YUMC) from $56 to $55 while keeping an Outperform rating on the stock. This update came after Yum China Holdings, Inc.’s (NYSE:YUMC) investor day, where the company shared its growth plans and offered detailed guidance. CLSA pointed out that store growth was better than expected. However, according to the research firm, expansion into lower-tier cities and franchise stores is expected to limit top-line growth to mid-single digits.

CLSA sees room for Yum China Holdings, Inc. (NYSE:YUMC) to improve its KFC margins if positive same-store sales growth can be achieved without higher labor costs, even when the focus of the market is on Pizza Hut’s recovery efforts.

The research firm slightly lowered its price target because of weaker unit store sales forecasts. However, CLSA continues to maintain its positive outlook on Yum China Holdings, Inc. (NYSE:YUMC) because of the stock’s protection against drops and expectations of delivery margins to improve. According to CLSA’s report, the company suggested during its investor day that it expects to raise its dividend payout starting in 2027.

Yum China Holdings, Inc. (NYSE:YUMC) is the largest restaurant company in China, operating more than 17,000 restaurants under 6 brands across more than 2,500 cities. The company operates and franchises restaurants under brands like KFC, Pizza Hut, and Taco Bell.

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Disclosure: None. This article is originally published at Insider Monkey.