KFC parent Yum plunges 18% after key China miss

That vendor, part of Aurora, Illinois- based OSI Group, also supplied McDonald’s Corporation and other fast- food chains. Brands operates the Taco Bell, Pizza Hut, and KFC restaurant chains. The company expects comps in the fourth quarter of 2015 to be driven by positive same-store sales growth at KFC partly offset by negative same-store sales at Pizza Hut Casual Dining.

A number of equities research analysts recently commented on YUM shares.

In Yum’s fiscal third quarter it’s adjusted earnings came in at $1.07 per share on $3.42 billion of revenue.

Contrary to the Indian performance, Yum!

The analyst also noted that with Yum now trading at about 19x his revised 2016 earnings-per-share forecast, which implies a multiple of roughly 8x for China. Analysts had expected 9% same-restaurant sales growth in that country. Finally, JPMorgan Chase & Co. reaffirmed an overweight rating on shares of Yum!

But the same thing that’s troubling Yum Brands investors is a wider concern: China.

The company has tweaked its marketing strategy, changed its menu and even opened an upscale Italian restaurant in Shanghai. The company saw a growth of 6.27 percent in its net profit at Rs 31.53 crore in April-June quarter.

More broadly, the emerging markets in general are weak.

Investors were stunned and livid at Yum Brand’s management for the incorrect forecast. However, a separate key emerging market, India, is presenting another problem.

Yum does not foresee the problems in China improving in the current fiscal year.

As many as 17 brokerage firms have rated Yum! But for now, given this quarterly miss and the market’s general impatience, it’s no surprise that Yum!

The EPS figure increased 13 cents on a year-over-year (YoY) basis, with the figure for the same quarter of last year being reported at 87 cents.

An early rally in stock prices lost steam by Wednesday afternoon following as crude oil prices gave up much of their gains. The 52-week high of Yum! The premium reflects the rising franchise mix in Yum’s portfolio, and the fact that China margins are significantly lower than their peak values.

Pandora Media Inc (P) dropped 6.1% or $1.35 to $20.63 after the online radio services provider agreed to acquire a live events technology provider Ticketfly, Inc for about $450 million in cash and stock. The dividend growth rate has evolved at the pace of 28% over the last 5 years and the payout ratio stands at the high level of 78.34%.

The Dow Jones industrial average rose 122.10 points, or 0.7 percent, to 16,912.29.

Sales in China rose by 2% in the three months to 5 September, despite strong marketing activity. They now have a $80.00 target price on the restaurant operator’s stock, down from their prior target price of $103.00.