YUMC stock is breaking out as restaurant operator Yum China announces a massive expansion and share buyback program.
Yum China is the largest restaurant group in China with about a 2% market share, Morningstar reported in early February. That's roughly double that of McDonald's, the second-largest player by market share.
Yum China operates KFC, Pizza Hut, Taco Bell, Lavazza, and East Dawning, a fusion of KFC with Chinese cuisine. It also owns the concepts for Little Sheep, Huang Ji Huang and COFFii & JOY.
But Yum China is still hankering for a larger piece of that market-share pie. The company, in its Q4 report on Wednesday, announced plans for 1,600 to 1,800 net new stores during the 2025 fiscal year.
Yum China expects the franchise mix for the new stores will gradually reach 40% to 50% for KFC. Pizza Hut is expected to reach 20% to 30% of the new stores over the next few years.
The restaurateur also said it plans to return $3 billion to shareholders in 2025 through 2026, adding to the $1.5 billion it returned in 2024.
YUMC Stock
YUMC stock eased Wednesday. The stock on Monday broke out above a 52 buy point for an 18-week consolidation. The current buy zone, which stretches 5% beyond the buy point, extends to 54.60.
Yum China shares added 6.8% in February and are up 8.5% in March.
YUMC stock has a 95 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score.
Shares have a 94 RS Rating, meaning the stock has outperformed 94% of the stocks in the IBD database over the past 52 weeks. YUMC's relative strength line is also near 52-week highs.
Yum China has a 21-Day ATR% of 3.16.
The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below.
