Latest news with #YUMC
Yahoo
10 hours ago
- Business
- Yahoo
UBS Ups Price Target on Yum China (YUMC) to $59, Sees Room for Aggressive Expansion
UBS raised its price target on Yum China Holdings (NYSE: YUMC) from $57.26 to $59.00 a few days earlier, while maintaining its Buy rating on the stock. The upward revision implies increasing confidence in Yum China's long-term expansion prospects, particularly through an increasingly franchise-driven model. According to the firm's analysis, supported by UBS Evidence Lab data tracking restaurant locations across China, Yum China Holdings (NYSE: YUMC) is positioned to exceed its current goal of 20,000 stores by 2026. UBS now sees the company potentially reaching 30,000 locations by 2030. A chef holding up a newly created dish, showcasing the creativity of the restaurant's menu offerings. A key component of this expansion is the shift toward franchising. UBS projects that by 2030, franchise stores will make up approximately 30% of the company's total, a sharp rise from 2024 levels. This transition is expected to unlock considerable capital efficiency benefits, which UBS believes are not fully reflected in current market expectations. The firm also forecasts that this expansion model will support compound annual cash flow growth of 12% from 2026 through 2030. Such performance, in UBS's view, should enable Yum China to deliver consistently strong shareholder returns over the latter half of the decade -- a key factor behind the decision to reaffirm the Buy rating. Previously we shared . While we acknowledge the potential of YUMC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Yahoo
27-04-2025
- Business
- Yahoo
3 Mid-Cap Stocks in the Doghouse
Many investors pay attention to mid-cap stocks because they have established business models and expansive market opportunities. However, their paths to becoming $100 billion corporations are ripe with competition, ranging from giants with vast resources to agile upstarts eager to disrupt the status quo. Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three mid-cap stocks to swipe left on and some alternatives you should look into instead. Market Cap: $16.97 billion One of China's largest restaurant companies, Yum China (NYSE:YUMC) is an independent entity spun off from Yum! Brands in 2016. Why Does YUMC Worry Us? Sizable revenue base leads to growth challenges as its 5.2% annual revenue increases over the last five years fell short of other restaurant companies Anticipated sales growth of 5.3% for the next year implies demand will be shaky Lacking pricing power results in an inferior gross margin of 18.6% that must be offset by turning more tables Yum China is trading at $45.71 per share, or 17.6x forward price-to-earnings. Read our free research report to see why you should think twice about including YUMC in your portfolio, it's free. Market Cap: $28.2 billion One of the largest homebuilders in America, Lennar (NYSE:LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities. Why Do We Steer Clear of LEN? Demand cratered as it couldn't win new orders over the past two years, leading to an average 22.1% decline in its backlog Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 10.8% annually Free cash flow margin shrank by 13.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive At $107.13 per share, Lennar trades at 8.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than LEN. Market Cap: $17.52 billion Originally a manufacturing company, Watsco (NYSE:WSO) today only distributes air conditioning, heating, and refrigeration equipment, as well as related parts and supplies. Why Do We Think Twice About WSO? Poor same-store sales performance over the past two years indicates it's having trouble bringing new shoppers into its stores Revenue growth over the past two years was nullified by the company's new share issuances as its earnings per share fell by 5.4% annually Diminishing returns on capital suggest its earlier profit pools are drying up Watsco's stock price of $456.08 implies a valuation ratio of 30.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why WSO doesn't pass our bar. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
Yahoo
27-04-2025
- Business
- Yahoo
3 Mid-Cap Stocks in the Doghouse
Many investors pay attention to mid-cap stocks because they have established business models and expansive market opportunities. However, their paths to becoming $100 billion corporations are ripe with competition, ranging from giants with vast resources to agile upstarts eager to disrupt the status quo. Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three mid-cap stocks to swipe left on and some alternatives you should look into instead. Market Cap: $16.97 billion One of China's largest restaurant companies, Yum China (NYSE:YUMC) is an independent entity spun off from Yum! Brands in 2016. Why Does YUMC Worry Us? Sizable revenue base leads to growth challenges as its 5.2% annual revenue increases over the last five years fell short of other restaurant companies Anticipated sales growth of 5.3% for the next year implies demand will be shaky Lacking pricing power results in an inferior gross margin of 18.6% that must be offset by turning more tables Yum China is trading at $45.71 per share, or 17.6x forward price-to-earnings. Read our free research report to see why you should think twice about including YUMC in your portfolio, it's free. Market Cap: $28.2 billion One of the largest homebuilders in America, Lennar (NYSE:LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities. Why Do We Steer Clear of LEN? Demand cratered as it couldn't win new orders over the past two years, leading to an average 22.1% decline in its backlog Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 10.8% annually Free cash flow margin shrank by 13.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive At $107.13 per share, Lennar trades at 8.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than LEN. Market Cap: $17.52 billion Originally a manufacturing company, Watsco (NYSE:WSO) today only distributes air conditioning, heating, and refrigeration equipment, as well as related parts and supplies. Why Do We Think Twice About WSO? Poor same-store sales performance over the past two years indicates it's having trouble bringing new shoppers into its stores Revenue growth over the past two years was nullified by the company's new share issuances as its earnings per share fell by 5.4% annually Diminishing returns on capital suggest its earlier profit pools are drying up Watsco's stock price of $456.08 implies a valuation ratio of 30.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why WSO doesn't pass our bar. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Yahoo
10-04-2025
- Business
- Yahoo
3 Reasons to Sell YUMC and 1 Stock to Buy Instead
Since October 2024, Yum China has been in a holding pattern, posting a small loss of 1.7% while floating around $46.51. However, the stock is beating the S&P 500's 7.8% decline during that period. Is now the time to buy Yum China, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it's free. Even with the strong relative performance, we don't have much confidence in Yum China. Here are three reasons why you should be careful with YUMC and a stock we'd rather own. One of China's largest restaurant companies, Yum China (NYSE:YUMC) is an independent entity spun off from Yum! Brands in 2016. A company's long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Yum China's 5.2% annualized revenue growth over the last five years was tepid. This was below our standard for the restaurant sector. Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite. Over the next 12 months, sell-side analysts expect Yum China's revenue to rise by 5.2%, close to its 5.2% annualized growth for the past five years. This projection is underwhelming and implies its newer menu offerings will not accelerate its top-line performance yet. Gross profit margins tell us how much money a restaurant gets to keep after paying for the direct costs of the meals it sells, like ingredients, and indicate its level of pricing power. Yum China has bad unit economics for a restaurant company, signaling it operates in a competitive market and has little room for error if demand unexpectedly falls. As you can see below, it averaged a 18.6% gross margin over the last two years. That means Yum China paid its suppliers a lot of money ($81.39 for every $100 in revenue) to run its business. Yum China isn't a terrible business, but it doesn't pass our quality test. Following its recent outperformance in a weaker market environment, the stock trades at 17.9× forward price-to-earnings (or $46.51 per share). This valuation multiple is fair, but we don't have much faith in the company. We're pretty confident there are more exciting stocks to buy at the moment. We'd suggest looking at a dominant Aerospace business that has perfected its M&A strategy. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
