/Yum%20Brands%20Inc_%20sign%20by-%20JHVEPhoto%20via%20iStock.jpg)
Yum! Brands, Inc. (YUM), headquartered in Louisville, Kentucky, develops, operates, and franchises quick-service restaurants worldwide. Valued at $37.74 billion by market cap, the company operates restaurants under the KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill brands, specializing in chicken, Mexican-style food, and pizza categories.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and YUM perfectly fits that description, signifying its substantial size, stability, and dominance in its industry. The company has over 59,000 restaurants in over 155 countries and territories, operated mainly by 1,500 franchisees.
The world’s largest restaurant company has fallen 7.6% from its 52-week high of $143.20, which it hit on Apr. 29. Shares of YUM are down 1.7% over the past three months, underperforming the broader S&P 500 Index’s ($SPX) 4.8% gains over the same time frame.
Longer term, YUM has declined 2.4% over the past year, and in 2024, the stock is up 1.3%. By contrast, the SPX is up 14.7% on a YTD basis and 25.8% over the past 52 weeks.
The stock has been trading below its 50-day moving average since mid-June but above its 200-day moving average since early February.
On May 16, YUM shares closed up more than 2% after the company announced a $2 billion stock buyback plan.
On May 1, YUM shares fell 6.5% in the pre-market session after the company reported its Q1 results. Its adjusted EPS came in at $1.15, falling short of the consensus estimate of $1.20. The company’s revenue was $1.60 billion, missing the Wall Street forecast of $1.72 billion due to lower-than-expected same-store sales. YUM’s management cited that it faced a “difficult operating environment” in the previous quarter but said it was on track to open 60,000 restaurants in 2024.
Rival McDonald's Corporation (MCD) has underperformed YUM. MCD stock has declined 11.2% in the past 52 weeks and is down 13.2% on a YTD basis.
Despite its recent underperformance compared to SPX, analysts are optimistic about YUM’s prospects. The stock has a consensus rating of “Moderate Buy” from the 24 analysts covering it, and the mean price target of $145.05 is a premium of 9.6% to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
