Yum China has moved -0.6% so far today on a volume of 229,878, compared to its average of 2,365,738. In contrast, the S&P 500 index moved -0.6%.
Over the last 52 weeks, the stock moved 16.7%, with a high of $58.2 and a low of $33.55. During this time, the stock underperformed the S&P 500 index by 36.9%.Yum China Holdings, Inc. owns, operates, and franchises restaurants in China. The large-cap Consumer Cyclical company has 147,000 full time employees and is based in Shanghai, China. Yum China has returned a 0.9% dividend yield over the last 12 months.
Snapshot of the Company's Thin Margins and Declining Cash Flows:
| 2018-12-31 | 2019-12-31 | 2020-12-31 | 2021-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $8,415 | $8,776 | $8,263 | $9,853 |
| Revenue Growth | n/a | 4.3% | -5.8% | 19.2% |
| Gross Margins | 15.63% | 15.96% | 15.33% | 14.27% |
| Gross Margins Growth | n/a | 2.11% | -3.95% | -6.91% |
| Operating Margins | 9.86% | 9.99% | 8.85% | 7.45% |
| Operating Margins Growth | n/a | 1.32% | -11.41% | -15.82% |
| Earnings Per Share | $1.79 | $1.84 | $1.95 | $2.28 |
| EPS Growth | n/a | 2.79% | 5.98% | 16.92% |
| Free Cash Flow (MM) | $863 | $750 | $695 | $442 |
| FCF Growth | n/a | -13.09% | -7.33% | -36.4% |
| Net Debt / EBITDA | -0.99 | 0.72 | 1.36 | 2.44 |
Basic Valuation Metrics Show Yum china Is Fairly valued:
Compared to the Consumer Cyclical sector's average of 24.11, Yum China has a trailing twelve month price to earnings (P/E) ratio of 27.8 and, based on its Eps guidance of 13.88, an expected P/E ratio of 4.0. The firm's price to earnings growth (PEG) is 0.08, which indicates that the company is undervalued in terms of its expected earnings growth. Yum China's price to book (P/B) ratio is 3.7 compared to its sector average of 3.11.
As of the date of publication, the company is trading 112.4% above their fair value as expressed by Benjamin Graham's formula. We calculate the Graham number as follows:
√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 2.01 * 15.317) = $26.32
There is Exuberant market sentiment About Yum China:
16 analysts are following Yum China and have set target prices ranging from $353.32 to $557.65 per share. On average, they have given the company a rating of buy. At today's prices, YUMC is trading -87.89% away from its average analyst target price of $461.76 per share, implying an analyst consensus of strong upside potential for the stock. The company has an average amount of shares sold short since 2.3% of the company's shares are tied to short positions. Institutions own 85.0% of Yum China's shares, while the insider ownership rate stands at 0.18%. The biggest shareholder is Invesco Ltd. with a 9.64% stake in the company worth approximately $2,256,450,365.00.
