/Yum%20Brands%20Inc_%20brands%20on%20phone%20by-%20T_Schneider%20via%20Shutterstock.jpg)
Headquartered in Louisville, Kentucky, Yum! Brands, Inc. (YUM) is a leader in the fast-food industry, recognized for its commitment to delivering delicious and convenient dining experiences. Valued at $38.52 billion by market cap, Yum! Brands is renowned for its innovative approach to quick-service dining and customer engagement. Its well-known restaurant chains, including KFC, Pizza Hut, and Taco Bell, have redefined fast-food dining across the globe, serving millions of customers with a wide array of flavorful options.
Shares of YUM have significantly underperformed the broader market over the past year. The stock has gained 2.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 19.6%. In 2024, the stock has gained 4.7%, compared to SPX's 12% gains on a YTD basis.
Narrowing the focus, YUM’s underperformance is also evident compared to the AdvisorShares Restaurant ETF (EATZ). The exchange-traded fund has gained 14.1% over the past year. Also, the stock's YTD gains fall short of the ETF’s 6.8% returns over the same time frame.
On Aug. 6, YUM reported its Q2 results. Revenue was $1.76 billion, missing analysts' expectations of $1.80 billion. The company’s net income was $367 million, and its EPS was $1.35, higher than Wall Street estimates of $1.32. The stock gained 2.7% on the day it released earnings.
For the current fiscal year, ending in December, analysts expect YUM’s EPS to grow 8.7% to $5.62 on a diluted basis. The company's earnings surprise history is mixed. It beat the consensus estimate in two of the last four quarters while missing on two other occasions.
Among the 25 analysts covering YUM stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” and 16 “Holds.”
On Aug. 7, Morgan Stanley (MS) analyst Brian Harbour maintained a “Buy” rating on Yum! Brands with a price target of 153, implying a potential upside of 11.9% from current levels.
The mean price target is $144.38, representing a 5.5% premium to YUM’s current price levels. The Street-high price target of $157 suggests an upside potential of 14.8%.
On the date of publication, Rashmi Kumari 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.
