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Yum! Brands, Inc. (NYSE:YUM) has enjoyed a bullish run in 2017 since spinning off Yum China Holdings Inc (NYSE:YUMC) at the end of 2016, but we think it’s reached the end of the road for this current trend. The stock reached a high of $78 in early September but has only gone on to form a lower high in mid-October after dropping to a new lower low in late September. We expect the stock to drop back down toward support at $73 in the run-up to the company’s earnings announcement on Nov. 2, before market open.
YUM’s quarterly performance is likely to have suffered from the impact of hurricanes Harvey and Irma, but we expect growth trends in general to slow for the company. Competitors like Domino’s Pizza, Inc. (NYSE:DPZ) have announced slower same-store sales growth, and we expect the same for Yum! Brands.
‘Buy to open’ the YUM November 72.50 Puts (YUM171117P00072500) for a maximum price of $1.10.
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