BofA Lowers Yum China (YUMC) PT, Keeps Buy Rating

Yum China Holdings, Inc. (NYSE:YUMC) is one of the 11 Best Food Stocks to Buy According to Wall Street Analysts. On July 7, BofA Securities reduced its price target for Yum China Holdings, Inc. (NYSE:YUMC) from $60.50 to $56.50 but kept a “Buy” rating.

The firm pointed out that Yum China Holdings, Inc. (NYSE:YUMC) has underperformed the MSCI China index by 16% since Liberation Day. This weaker performance was mainly attributed to investors reassessing the company’s long-term growth after Yum China Holdings, Inc. (NYSE:YUMC) shifted its focus to smaller stores and franchising.

BofA’s channel checks showed that Yum China Holdings, Inc.’s (NYSE:YUMC) same-store sales growth (SSSG) was around 0-1% in the second quarter. There were also indications that the performance in June might surpass expectations. BofA also observed sequential delivery order growth of over 10% in the past weekend.

The research note also mentioned that Meituan and Alibaba have started offering strong delivery subsidies. These discounts could help Yum China Holdings, Inc. (NYSE:YUMC) achieve same-store sales growth in the third quarter of 2025, which is usually a busy season for the company. The research firm expects same-store sales to improve in the second half of 2025.

Yum China Holdings, Inc. (NYSE:YUMC) is the largest restaurant company in China, operating more than 16,000 restaurants under 6 brands across more than 2,300 cities. The company operates and franchises restaurants under brands like KFC, Pizza Hut, and Taco Bell.

While we acknowledge the potential of YUMC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best American Semiconductor Stocks to Buy Now and 11 Best Fintech Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.