Want to see YUMC full AI Analyst Report?
Top Page
Yum China Holdings
(NYSE:YUMC)
Select Model
Select Model
Rating:76Outperform
Price Target:
$54.00
â–²(24.42% Upside)
Action:Reiterated
Date:08/07/26
The score is driven primarily by improving financial profitability and a healthier leverage profile, alongside a bullish technical setup with price above major moving averages and positive MACD. Guidance and strategic actions from the latest earnings call add support via continued transaction momentum, margin/economics upside from the Pizza Hut brand acquisition, and sizable planned shareholder returns, while the main offsets are slowing revenue growth and only moderate cash-to-earnings conversion.
Positive Factors
Improving Profitability
Material margin expansion, with stability in 2023–TTM, indicates stronger restaurant economics and operating discipline. Sustained profitability improvement can support reinvestment, absorb cost inflation and strengthen earnings quality over the next several quarters.
Negative Factors
Delivery Cost Pressure
A structurally higher delivery mix may increase rider, packaging and service costs while limiting restaurant margin expansion. Unless pricing, productivity or channel economics improve, digital order growth could translate into lower incremental profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving Profitability
Material margin expansion, with stability in 2023–TTM, indicates stronger restaurant economics and operating discipline. Sustained profitability improvement can support reinvestment, absorb cost inflation and strengthen earnings quality over the next several quarters.
Read all positive factors
Yum China Holdings (YUMC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.29B
Dividend Yield2.17%
Average Volume (3M)1.66M
Price to Earnings (P/E)17.8
Beta (1Y)0.41
Revenue Growth8.78%
EPS Growth12.47%
CountryUS
Employees130,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)2.74
Shares Outstanding342,458,130
10 Day Avg. Volume1,618,966
30 Day Avg. Volume1,655,539
Financial Highlights & Ratios
PEG Ratio2.46
Price to Book (P/B)3.19
Price to Sales (P/S)1.45
P/FCF Ratio20.40
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$61.37Price Target Upside41.42% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)2.95
Revenue Forecast (FY)$12.86B
Yum China Holdings Business Overview & Revenue Model
Company Description
Yum China Holdings, Inc. is a prominent player in China's restaurant sector, engaging in the ownership, operation, and franchising of various dining establishments. Its core operations are structured around two primary segments: KFC and Pizza Hut....
How the Company Makes Money
Yum China primarily makes money by selling food and beverages through company-owned restaurants, which account for the majority of its sales. Its core revenue streams include (1) restaurant sales from dine-in, takeaway, and delivery orders across ...
Yum China Holdings Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call presented a strong operational performance with sustained same‑store transaction momentum, record operating profit, rapid store expansion, successful rollout of new modules (KCOFFEE, KPRO, Burger Bar) and a strategic milestone in acquiring the Pizza Hut brand — all supporting durable growth and shareholder returns. Key near‑term challenges include margin pressure from a higher delivery mix and related rider costs, ticket average declines from smaller orders, rising COS and labor, and financing/implementation considerations tied to the Pizza Hut acquisition. Management reiterated confidence in meeting full‑year 2026 targets and outlined concrete levers to offset headwinds (efficiency gains, lease renegotiations, menu innovation), while the Pizza Hut acquisition offers medium‑term margin accretion and accelerated store economics.Positive Updates
Simultaneous Growth Across Key Metrics
Ninth consecutive quarter with system sales growth, operating profit growth and OP margin expansion. Company reported revenue up 13% year‑over‑year, operating profit increase cited at 14% (CEO remarks), and diluted EPS up 21% year‑over‑year (CEO remarks).
Negative Updates
Rider/Delivery Mix Pressure on Costs and Margins
Delivery sales mix rose from 45% last year to 54% this year, increasing rider costs and exerting ~140 basis points margin headwind in Q2. Delivery‑related higher packaging and service costs contributed to elevated COS and labor ratios.
Read all updates
Q2-2026 Updates
Positive
Negative
Simultaneous Growth Across Key Metrics
Ninth consecutive quarter with system sales growth, operating profit growth and OP margin expansion. Company reported revenue up 13% year‑over‑year, operating profit increase cited at 14% (CEO remarks), and diluted EPS up 21% year‑over‑year (CEO remarks).
Read all positive updates
Company Guidance
Management guided Q3 restaurant margin to be stable to slightly positive year‑over‑year and OP margin roughly in line with Q3 last year, while targeting to maintain positive same‑store sales in Q3 and deliver the 15th consecutive quarter of positive same‑store transaction growth; for full‑year 2026 (excluding the Pizza Hut deal) they reiterated a same‑store sales index of 100–102, mid‑ to high‑single‑digit system sales growth, high‑single‑digit operating profit growth, double‑digit EPS growth, a slight improvement in restaurant and OP margins, and remaining on track for ~20,000 stores by year‑end. The Pizza Hut brand acquisition (expected to close in August) will be funded initially with an approximately $1.2 billion offshore bridge loan at ~2% for up to 12 months; eliminating the 3% license fee is expected to add ~2.8% to Pizza Hut’s restaurant OP margin (≈60 bps to Yum China overall), ~30–40 bps to Q3 margins and ~20–30 bps to full‑year 2026, and the deal is expected to be slightly EPS accretive in 2026 and mid‑single‑digit accretive in 2027–28. Capital returns remain a priority: $1.5 billion to shareholders in 2026 (~10% of current market cap), with $718 million returned in H1 (share repurchases $515M, dividends $203M), and a post‑2026 policy to return ~100% of annual free cash flow to shareholders (projected average $900M–$1B+ in 2027–28 and >$1B thereafter). Management also reiterated rollout targets for growth modules: KCOFFEE on track for ~5,000 locations by end‑2027, KPRO to ~800 locations, Pizza Hut Burger Bar 500–600 locations by end‑2026, and an expectation that Pizza Hut net openings will exceed 800 per year in 2027–28.Yum China Holdings Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.44B | 11.80B | 11.30B | 10.98B | 9.57B | 9.85B |
| Gross Profit | 2.14B | 2.04B | 1.89B | 1.89B | 1.43B | 1.41B |
| EBITDA | 1.93B | 1.82B | 1.68B | 1.59B | 1.26B | 1.25B |
| Net Income | 975.00M | 929.00M | 911.00M | 827.00M | 442.00M | 990.00M |
Balance Sheet | ||||||
| Total Assets | 10.87B | 10.78B | 11.12B | 12.03B | 11.83B | 13.22B |
| Cash, Cash Equivalents and Short-Term Investments | 1.39B | 1.38B | 1.84B | 2.60B | 3.15B | 4.00B |
| Total Debt | 2.30B | 2.34B | 2.41B | 2.54B | 2.40B | 2.83B |
| Total Liabilities | 4.81B | 4.68B | 4.69B | 4.91B | 4.67B | 5.30B |
| Stockholders Equity | 5.36B | 5.38B | 5.73B | 6.41B | 6.48B | 7.06B |
Cash Flow | ||||||
| Free Cash Flow | 945.86M | 840.00M | 714.00M | 763.00M | 734.00M | 442.00M |
| Operating Cash Flow | 1.59B | 1.47B | 1.42B | 1.47B | 1.41B | 1.13B |
| Investing Cash Flow | 17.80M | -5.00M | -178.00M | -743.00M | -522.00M | -855.00M |
| Financing Cash Flow | -1.73B | -1.69B | -1.64B | -716.00M | -844.00M | -313.00M |
Yum China Holdings Technical Analysis
Positive
43.40
Price Trends
44.45
Positive
45.53
Positive
47.42
Positive
Market Momentum
0.98
Positive
65.71
Neutral
51.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUMC, the sentiment is Positive. The current price of 43.4 is below the 20-day moving average (MA) of 47.14, below the 50-day MA of 44.45, and below the 200-day MA of 47.42, indicating a bullish trend. The MACD of 0.98 indicates Positive momentum. The RSI at 65.71 is Neutral, neither overbought nor oversold. The STOCH value of 51.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for YUMC.
Yum China Holdings Risk Analysis
Yum China Holdings disclosed 78 risk factors in its most recent earnings report. Yum China Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Yum China Holdings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $25.19B | 20.84 | 56.01% | 3.12% | 9.39% | 17.16% | |
76 Outperform | $16.29B | 17.84 | 17.84% | 2.44% | 8.78% | 12.47% | |
69 Neutral | $39.82B | 19.02 | -30.35% | 1.96% | 10.28% | 56.85% | |
68 Neutral | $189.26B | 21.81 | -561.20% | 2.78% | 6.30% | 5.37% | |
65 Neutral | $11.13B | 18.89 | -15.15% | 2.24% | 5.16% | 2.13% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
46 Neutral | $766.09M | 28.79 | -6.17% | 6.06% | -5.65% | -64.96% |
* Consumer Cyclical Sector Average
YUMC
Yum China Holdings
48.88
4.79
10.87%
DRI
Darden Restaurants
217.95
17.76
8.87%
DPZ
Domino's Pizza
334.37
-104.04
-23.73%
MCD
McDonald's
269.13
-36.67
-11.99%
PZZA
Papa John's International
23.32
-19.35
-45.35%
YUM
Yum! Brands
152.33
7.11
4.90%
Yum China Holdings Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Yum China Secures Full Ownership of Pizza Hut China
Positive
Aug 7, 2026
On August 7, 2026, Yum China completed the US$1.2 billion purchase of Willow Glade Investments, gaining full ownership of the Pizza Hut brand in Mainland China after 36 years of operating it under license. To fund the deal, the company arranged an...
M&A TransactionsPrivate Placements and Financing
Yum China Secures Bridge Loan for Planned Acquisition
Positive
Aug 6, 2026
On July 31, 2026, Yum China Holdings, Inc. entered into a bridge credit agreement with HSBC Bank USA and Citibank N.A., Hong Kong Branch, securing a senior unsecured term loan facility of up to CNH 8.4 billion. The facility allows a single draw du...
Business Operations and StrategyExecutive/Board ChangesStock BuybackShareholder Meetings
Yum China Shareholders Approve Governance, Capital Flexibility Measures
Positive
May 28, 2026
Yum China Holdings, Inc., a leading restaurant operator in China, held its 2026 annual meeting of stockholders on May 28, 2026, in Hong Kong, where 78.30% of outstanding common stock was represented, establishing a quorum. Shareholders elected 12 ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.