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Analysts Have Made A Financial Statement On Yum China Holdings, Inc.'s (NYSE:YUMC) Third-Quarter Report
It's been a pretty great week for Yum China Holdings, Inc. (NYSE:YUMC) shareholders, with its shares surging 10% to US$49.77 in the week since its latest third-quarter results. It was a credible result overall, with revenues of US$3.5b and statutory earnings per share of US$0.91 both in line with analyst estimates, showing that Yum China Holdings is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Yum China Holdings' 27 analysts is for revenues of US$13.7b in 2027. This would reflect a reasonable 7.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 16% to US$3.42. In the lead-up to this report, the analysts had been modelling revenues of US$13.7b and earnings per share (EPS) of US$3.40 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for Yum China Holdings
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$62.11. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Yum China Holdings, with the most bullish analyst valuing it at US$77.00 and the most bearish at US$56.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Yum China Holdings'historical trends, as the 6.1% annualised revenue growth to the end of 2027 is roughly in line with the 5.5% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 9.3% annually. So it's pretty clear that Yum China Holdings is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Yum China Holdings' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Yum China Holdings going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 3 warning signs for Yum China Holdings (1 is a bit unpleasant!) that you need to take into consideration.
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