Yum! Brands Inc. (NYSE: YUM) is set to report its earnings Tuesday after the markets close.
Source: courtesy of KFC
Thomson Reuters has estimates of $0.89 in earnings per share (EPS) and $3.48 billion in revenue. In the same quarter of the previous year it posted $0.85 in EPS and $3.47 billion in revenues. The current quarter has estimates of $0.89 in EPS and $4.34 in revenues. Its consensus estimates for 2014 are $3.41 in EPS and $13.72 billion in revenues.
Yum! Brands sometimes offers annual guidance ahead of time for the following year. Whether it will offer that guidance with this report is unknown. For 2015, the consensus estimates are EPS of $3.96 and revenues of $15.15 billion. So, despite the problems in China, the expectation is for 2015 to see 16% EPS growth and just over 10% in revenue growth.
The company has seen its shares stay within the range of $70 to $74 in the weeks ahead of the report, dating back to late July. Earlier in July the shares had a relatively steep drop from the 52-week high, $83.58 to as low as $68.09. Shares broke under the key 200-day moving average at the end of July, and its shares have not come back much since then. In fact, the 50-day moving average broke under the 200-day moving average in early September, and that has now been acting as resistance on the chart. As of Tuesday, the 50-day moving average was $71.71 and the 200-day moving average was all the way up at $74.39.
Options traders appear to be braced for a move of up to $1.75 in either direction. That being said, the closest put and call strike prices are not full of massive open interest, indicating that options traders are being active here. The open interest in the closest speculative strike prices is more dominated by put options.
Yum! Brands shares were down 1.7% to $70.18 in the first two hours of trading Tuesday. The stock has a consensus analyst price target of $79.58 and a 52-week trading range of $64.08 to $83.58. The company has a market cap of $30 billion and currently trades at 17.7 times its future earnings.
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