JPMorgan cuts Yum China target, says buy the selloff

JPMorgan lowered the firm’s price target on Yum China to $65 from $77 and keeps an Overweight rating on the shares. The analyst attributes the post-earnings selloff to market expectations being too high, the 6% currency effect not fully captured in consensus and “fragile market confidence and risk-off mode.” The firm sees cyclical challenges without structural issues for Yum China and views the pullback as overdone. JPMorgan expects the company to repurchase shares, which serves as a catalyst for the stock, and tells investors to buy the selloff.