Goldman Sachs downgraded Yum China Holdings stock on Friday, and said it sees limited upside as the stock has gained 22% since the company reported earnings on April 6. The S&P 500 has gained just 2% in the same period, the bank wrote in a note. Analyst Michelle Cheng said she is still positive on margins, but the market is pricing in a roughly 2% rise in same-store sales growth in 2017, while Goldman is expecting growth of just 1%. “Our sensitivity analysis also suggests a 2 percentage point increase in 2018 same-store sales growth vs. Goldman Sachs estimate would result in an implied value that is only about 5% higher than the current share price,” Cheng wrote. “As such, we downgrade the stock to Neutral from Buy, with an unchanged target price, and await a better re-entry point.” Yum China shares have gained 32% in 2017, while the S&P 500 has gained 6.7%.
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