YUMC
Yum China Holdings, Inc.
$45.53
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 18.8% below fair value
You pay
$45.53
Bear
$46.95
Fair
$56.08
Bull
$65.20
Bear
$46.95
+3.1%
$2.53 × 18x P/E
Fair
$56.08
+23.2%
$2.53 × 22x P/E
Bull
$65.20
+43.2%
$2.53 × 25x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
18.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $61.07 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $56.08 per share.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples