Food & Beverage

Cramer: Yum! 'Systematically Underestimated' by Wall Street

Yum! China Sales Bounce Back
Yum! China Sales Bounce Back

CNBC's Jim Cramer thinks Yum! Brands, the owner of KFC, Taco Bell and Pizza Hut brands, is the victim of an undue negative bias from Wall Street and says the stock will head higher.

After Yum! announced a smaller-than-expected drop in sales in China following a food scare arising from its chicken suppliers, Cramer said "the analysts are skeptical, but they were quite wrong."

"(CEO) David Novak, I think, is money in the bank. He said that it would happen, it's ahead of his own schedule. I believe in this stock. I think what will happen is that these analysts will be dragged kicking and screaming," Cramer said, indicating that the negative bias may persist even as the stock price heads upward.

"I believe [Novak] is systematically underestimated by Wall Street," Cramer said. "I think Yum is done going down, I think this is the beginning of a good streak of numbers."

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"I'm very encouraged here, the analysts are not. There are very few analysts that are saying that this is the beginning of the end," Cramer said, suggesting there is an impending a rebound for the stock.

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Cramer added that the situation for Yum! reminds him of when analysts were similarly negative on McDonald's when it was trading at $85-$87. "Of course, the stock went to $98," Cramer said.

Jim Cramer's charitable trust owns shares of Yum! Brands

— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul