Yum Brands' stock slipped 1% in premarket trade Tuesday, after RW Baird downgraded the restaurant operator because of valuation concerns, as the stocks' recent rally took it above Analyst David Tarantino's $80 price target. He lowered his rating to neutral, after being at outperform for the last year. The stock has run up 13% since the end of January to close Monday at 7 1/2-month high of $81.80. Tarantino raised his stock price target to $84 from $80. "Although speculation about possible shareholder activism could support short-term sentiment, we prefer to stay focused mainly on the fundamental picture in making our recommendation at this stage," Tarantino wrote in a note to clients. "We remain confident in longer-term fundamentals, but we still see elevated risk on Yum (especially at current valuation metrics) related to the uncertain timing/trajectory of the China recovery."
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