|Bid||0.00 x 800|
|Ask||0.00 x 1000|
|Day's Range||41.24 - 42.24|
|52 Week Range||30.10 - 44.61|
|Beta (3Y Monthly)||0.81|
|PE Ratio (TTM)||23.40|
|Earnings Date||Apr 29, 2019 - May 3, 2019|
|Forward Dividend & Yield||0.48 (1.17%)|
|1y Target Est||42.42|
The stock market's recession fears are in the rearview mirror. Year-to-date, the S&P 500 is up 11%, and it's up nearly 20% from its Christmas Eve 2018 lows, as the big risks in late 2018 (stalling trade talks, a hawkish Federal Reserve and slowing economic growth) have all dramatically improved in early 2019.Restaurant stocks have been front-and-center of the bounce-back rally in stocks. That's because as big economic risks have faded, consumers have regained their strength, and the whole restaurant industry has benefited from higher traffic. Indeed, despite adverse weather conditions, comparable sales growth across the entire restaurant industry came in at a two-year high in the December/January period, according to TDn2K.Consequently, restaurant stocks have been in rally mode. Not all of them will remain so for the rest of 2019, however. Instead, as the year rolls on, industry-wide tailwinds will cool, and there will be a big divergence between winners and losers in this industry.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Smart Money Stocks to Buy Now With that in mind, let's take a look at seven restaurant stocks to watch in 2019, and try to pick out the winners in this group. Restaurant Stocks to Watch: McDonald's (MCD)Stance: BullishAnalysis: At the top of the list of restaurant stocks to watch in 2019 is global fast casual giant McDonald's (NYSE:MCD).The story here is simple. Over the past several years, McDonald's has reinvented itself to be more relevant to today's health-conscious consumers. That included revamping the menu, improving product quality and expanding product assortment. In so doing, McDonald's has improved relevance and popularity, while sustaining industry-wide low prices and high convenience. The net result has been robust comparable sales growth.This will continue. McDonald's is continuing to revamp its menu, including swapping out frozen patties for fresh patties, and as these initiatives continue to roll out, the numbers here will remain good. Meanwhile, the valuation on MCD stock is reasonable and in line with its long-term average. As such, upward and outward is the most likely path forward for MCD stock in 2019. Chipotle (CMG)Stance: BearishAnalysis: Second on this list is Chipotle (NYSE:CMG), the restaurant chain which has come back from the dead to once again become a Wall Street (and Main Street) favorite.Right now, everyone on Wall Street is applauding Chipotle's new growth initiatives, including delivery expansion, menu innovation and new marketing campaigns. These initiatives are good, and they are working. Comparable sales growth has been consistently positive and impressive. Margins are moving higher. Profits are rising. Everything is going right for Chipotle. * 7 Financial Stocks With Accelerating Growth But the valuation more than reflects these positives, and importantly ignores competition risks. Namely, Chipotle isn't what it used to be, nor will it ever be again. The healthy food trend has passed the company up, and now all the craze is about unique sushi, poke bowls, superfood cafes and fresh sandwich shops. Thus, while growth will remain good going forward, it won't ever become good enough to warrant a nearly 50x forward multiple on CMG stock, meaning the next move in this stock will likely be lower. Yum (YUM)Stance: NeutralAnalysis: Next up is global fast casual giant Yum (NYSE:YUM), the parent company of Taco Bell, KFC and Pizza Hut.The fundamentals here are pretty good. Taco Bell is on fire, and has been for a long time due to favorable millennial appeal. KFC is doing just fine as well. Pizza Hut is finally returning to growth after several bad quarters. Meanwhile, the company is re-franchising essentially all of its locations and turning into an asset-light, hugely profitable, money-making machine. This re-franchising does kill revenues, but the revenue slicing is like getting rid of all the unwanted fat. Profits are consequently moving higher.All of this will continue for the foreseeable future. You will get steady and healthy comparable sales and bottom line growth. But, the valuation underlying YUM stock seems to already reflect that, with the forward P/E multiple at a multiyear high approaching 25 and the trailing dividend yield at a multiyear low of 1.8%. As such, the valuation seems full, meaning that the strong fundamentals won't drive that much more upside in YUM stock. Yum China (YUMC)Stance: NeutralAnalysis: Any discussion of Yum would be incomplete without talking about its Chinese counterpart, Yum China (NYSE:YUMC).At its core, Yum China is at the heart of a still very healthy China restaurant growth narrative. For all intents and purposes, China remains a double-digit consumption growth economy thanks to urbanization and digitization tailwinds, while the dining market remains a high single-digit growth sector of that red-hot economy, powered by deeper digital penetration and robust unit growth (restaurants per capita in China remain well below the developed country norm). * 10 Hot Stocks Leading the Market's Blitz Higher Because of this, Yum China will remain a big revenue and profit grower over the next several years. Ultimately, those healthy fundamentals will push YUMC stock higher. But, at current levels (nearly a 25x forward earnings while it sits near 52-week highs), YUMC stock seems more than priced for big growth to persist. As such, valuation will cap upside in the near term. Restaurant Stocks to Watch: Starbucks (SBUX)Stance: BearishAnalysis: Another restaurant stock worth watching in 2019 is global coffee giant Starbucks (NASDAQ:SBUX), mostly because the stock appears to be out over its skis at the current moment.In the big picture, Starbucks is a stable growth company that has been, still is and will remain the leader of the global retail coffee game. But competitors are chipping away at that leadership position. Namely, indie coffee shops are stealing away trend-oriented consumers, while McDonald's and other fast casual giants are stealing away price-oriented consumers. Thus, while Starbucks will remain the leader in the breakfast drink category, the company will lose share in this market for the foreseeable future.The net result will be slower-than-normal revenue and profit growth. The reason that's a problem for SBUX stock is that it isn't priced for slower-than-normal growth. Instead, SBUX stock has a bigger-than-normal valuation at around 26 forward earnings. This convergence of slower-than-normal growth and a bigger-than-normal valuation will ultimately result in SBUX stock falling later in 2019. Domino's Pizza (DPZ)Stance: NeutralAnalysis: One restaurant stock that investors should pay close attention to given its secular attachment to the delivery aspect of the food industry is Domino's Pizza (NYSE:DPZ).For a long time, Domino's and other pizza chains were the only game in town when it came to fast food delivery. Thus, the delivery tailwind and the mainstream emergence of the stay-at-home economy was a big positive for this company. But, then food ordering platforms like Postmates and Door Dash democratized delivery services. Now, essentially every fast food chain has delivery capability. * Should You Buy, Sell, Or Hold These 7 Medical Cannabis Stocks? This has leveled the playing field in the delivery game, and neutralized a big advantage Domino's had over its peers. Nonetheless, management continues to do everything right to keep growth on track, and the company is also benefiting from persistent struggles at Papa John's (NASDAQ:PZZA). Thus, in the big picture, growth remains good here -- it will just slow going forward. Good but slower growth seems appropriately priced in here, at 29x forward earnings (in line with its long term average multiple). Dave & Buster's (PLAY)Stance: BullishAnalysis: Last but not least on this list of restaurant stocks to watch is multi-entertainment destination Dave & Buster's (NASDAQ:PLAY).I'm bullish on PLAY stock for one simple reason: the company is perfectly aligned to win as we increasingly shift towards an experience-oriented consumer economy. Long story short, consumers are increasingly valuing experiences over products, and consumption expenditure growth on experiences has significantly outpaced consumption expenditure growth on products over the past few years. Dave & Buster's is at the heart of this transition by offering a multi-entertainment experience that includes a restaurant, sports bar and arcade.Over time, consumers will continue to place greater emphasis on experiences. The net result will be more share of wallet allocated to Dave & Buster's. That will push revenues, margins and profits higher, which will ultimately drive PLAY stock to new highs over time.As of this writing, Luke Lango was long MCD and PLAY. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Cheap Stocks to Buy Right Now * 5 Stocks Under $5 to Buy Before They Soar * 5 Consumer Stocks to Cash Out Of Compare Brokers The post 7 Restaurant Stocks to Watch in 2019 appeared first on InvestorPlace.
Yes, every day there are links from the Kudlow-Mnuchin camp that things are going well and we are closing in on a deal... and then from the Lighthizer-Navarro camp that there can be no deal without fundamental change by the People's Republic of China that would be an about-face on the demanding of joint ventures that allow for routine intellectual property theft.
Let's look closer at the charts and indicators for Yum China, which earned a mention from Jim Cramer in his opening commentary. In this daily bar chart of YUMC, below, we can see a downtrend until late December, when prices did not make a lower low. Since October the gaps have been on the upside, but trading volume has not been as intense as what was seen in the decline.
What slowdown? While everyone and their best friend has been worried about a massive slowdown in China economic activity, Yum China (NYSE:YUMC) reported robust fourth-quarter numbers last week that didn't show any signs of a slowdown. Comparable sales growth across the whole system improved. KFC comps came in at their best level since Q1. Pizza Hut comps were the best they've been all year . Margins improved. The outlook was healthy. The conference call was bullish.Overall, it was a really good quarter from Yum China, which dispelled the "China is falling apart" bear thesis. YUMC stock is up 15% since the report.Compare this directly to Yum! Brands (NYSE:YUM), which this morning reported a year-over-year earnings decline and a revenue miss. So far in this morning's trading, YUM is down about 5%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhile there's reason to be bullish on an economic turnaround in China and on Yum China's numbers remaining impressive over the next several quarters, further upside in YUMC stock seems limited for the foreseeable future. The valuation is full-up, and investors are seemingly already pricing in healthy and stabilized growth for a lot longer. * The 9 Best Stocks to Invest In During a Manic Market As such, unless Yum China's comparable sales trajectory improves meaningfully over the next few quarters (which seems unlikely), then YUMC stock will likely trade sideways over the next few months. That means this rally is a good opportunity to take profits. What Slowdown?We've all heard the news. We've all seen the numbers. China's economy is rapidly slowing. GDP growth is running at a thirty-year low, while retail sales growth is running at a fifteen year low and consumer and business confidence are slipping.But, you wouldn't guess any of that by just looking at Yum China's Q4 numbers.Nothing about Yum China's Q4 earnings report indicates that China's consumer economy is slowing. Total comparable sales growth was 2%, better than the full-year 2018 mark and the best mark since the first quarter. KFC's comps were up 3%, also the strongest reading since the first quarter. Meanwhile, losses at Pizza Hut narrowed, with comps coming in at down 4%, better than the third quarter's 5% drop.Because unit economic trends didn't deteriorate, Yum China kept opening stores. In 2018, the company opened 819 stores, or more than two new stores a day. Thus, this company remains well on track to grow its store base to 20,000 over the next several years (the store base currently stands at under 8,500).Also, margin trends improved during the quarter. Margin compression has been a major headwind all year long. That wasn't the case in the fourth quarter. Despite sizable wage and commodity inflation, company-wide margins were actually stable year-over-year. Thus, once inflation backs off, margins will have runway to move higher.Overall, the quarter was very good. Growth trends are actually improving, as are margin trends, at a time when they are supposed to be deteriorating. That speaks to the strength of the underlying Yum China growth narrative, and the staying power and resilient popularity of KFC and Pizza Hut in China. Yum China Stock Is Fully ValuedStrong Q4 numbers confirm the health of Yum China's underlying growth drivers.Namely, China remains a double-digit consumption growth economy thanks to urbanization and digitization tailwinds, while the dining market remains a high single-digit growth sector of that red-hot economy, powered by deeper digital penetration and robust unit growth. (Restaurants per capita in China remain well below the developed country norm.)Yum China is at the heart of that growth narrative. As such, this company will benefit from mid single-digit unit growth over the next several years, and flat to low single-digit comparable sales growth. That combination should lead to mid to high single-digit revenue growth. A mid to high single-digit revenue growth rate, coupled with cooling inflation trends, should help push margins slightly higher over the next five years.Modeling those assumptions out, $2.60 seems like a reasonable EPS target for Yum China by fiscal 2024. Big restaurant stocks normally trade around 20x forward earnings. Based on that average forward multiple, a reasonable fiscal 2023 price target for YUMC stock is $52. Discounted back by 9% per year (1% below my normal 10% discount rate to account for the 1% yield), that equates to a fiscal 2019 price target in the mid-to-upper $30's.Thus, at the current YUMC stock price of $41.50, the stock seems fully valued, if not a little expensive. * 10 Monster Growth Stocks to Buy for 2019 and Beyond Bottom Line on YUMC StockYum China's Q4 numbers were really good, and underscore that this company's long term growth narrative remains vigorous. But, the valuation on YUMC stock seems full after this recent pop. Further upside seems limited. The most likely outcome over the next few months for YUMC stock is sideways trading.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * Are These 7 Dividend Aristocrats ETFs Fit for a King? * 7 of the Best Emerging Markets Stocks to Buy * 5 Gold Stocks That Should Glitter in 2019 Compare Brokers The post After The Post-Earnings Pop, Upside for Yum China Stock Looks Limited appeared first on InvestorPlace.
NEW YORK, Feb. 04, 2019 -- In new independent research reports released early this morning, Fundamental Markets released its latest key findings for all current investors,.
Check out the companies making headlines midday Friday:Papa John's PZZA — The third-largest pizza delivery company saw its stock fall 8.9 percent after Reuters reported Papa John's would not sell itself , despite offers from private equity firms.
Yum China beat earnings estimates but fell short on revenue; however, the company's expanding footprint is laying the groundwork for growth.
Investors are looking at shares of Yum China Holdings Inc. Yum China's stock jumped more than 10% Friday after the company reported fourth-quarter earnings that surpassed analysts' expectations - driven in large part by robust same-store sales at the company's KFC restaurant chains. The owner of KFC, Pizza Hut and Taco Bell reported fourth-quarter net income of $74 million, or 19 cents a share, compared with losses of $107 million, or 28 cents a share, in the year-ago period.
Yum China's (YUM) strategy of store openings and a robust performance at KFC lead it to witness revenue growth in the fourth quarter of 2018.
Check out the companies making headlines before the bell: Merck MRK – Merck earned an adjusted $1.04 per share for the fourth quarter, beating estimates by a penny a share. Revenue came in very slightly above Wall Street forecasts.
Yum China (YUMC) delivered earnings and revenue surprises of 71.43% and -1.14%, respectively, for the quarter ended December 2018. Do the numbers hold clues to what lies ahead for the stock?
Check out the companies making headlines after the bell:Shares of Amazon AMZN rose as much as 3 percent and then dipped more than 2 percent negative in extended trading Thursday after reporting better-than-expected earnings and light guidance.
Yum China Holdings Inc. shares rose 3.8% in the extended session Thursday after the company beat Wall Street earnings expectations. The company reported fourth-quarter net income of $74 million, or 19 cents a share, compared with losses of $107 million, or 28 cents a share, in the year-ago period. Adjusted for changes to the U.S. tax code and acquisition costs, earnings were 12 cents a share. Revenue rose 2% to $1.91 billion from $1.87 billion in the year-ago period. Analysts surveyed by FactSet had estimated adjusted earnings of 9 cents a share on revenue of $1.92 billion. For the first quarter, analysts model adjusted earnings of 54 cents on sales of $2.29 billion. Yum China stock has fallen 21% in the past year year, with the S&P 500 index rising 5.1%.
Fourth quarter total revenues grew 2% or 7% in constant currency; Fourth quarter total system sales grew 6% and same-store sales grew 2% in constant currency ; Opened 819 gross new stores in 2018 SHANGHAI ...
Yum China Holdings (NYSE: YUMC ) will be releasing its next round of earnings this Thursday, Jan. 31. For all of the relevant information, here is your guide for the Q4 earnings announcement. Earnings ...
"Halftime Report" trader Pete Najarian spots unusual options activity in shares of the iShares China large-cap ETF. He also provides updates on his Intel & Yum China trades.