U.S. News

Yum! Stock Falls on Downgrade, E.coli Concerns


Yum! Brands shares fell after an analyst downgraded the stock due to concerns about slowing sales momentum in the U.S. and difficult upcoming sales comparisons at KFC and Taco Bell.

Wachovia Securities analyst Jeffrey Omohundro, who lowered his rating on the stock from "Outperform" to "Market perform," also said there could be a short-term, although potentially significant, negative sales impact at Taco Bell related to its recent E. coli outbreak in the Northeastern United States.

U.S. regulators said on Friday that 63 people in six states have fallen ill in an outbreak of E. coli cases, most of which are linked to the Taco Bell chain.

In a conference call, U.S. health regulators called the outbreak "ongoing" and said they have not confirmed the exact source of the bacteria. They are testing a variety of food samples.

Taco Bell closed a number of stores voluntarily and pulled green onions, also known as scallions, from all of its 5,800 U.S. restaurants after tests showed three samples were "presumptive positive" for a strain of E. coli.