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Investing.com - Guggenheim lowered its price target on Yum! Brands (NYSE:YUM) to $160.00 from $167.00 on Tuesday, while maintaining a Buy rating on the fast-food restaurant operator’s stock. The company, currently trading at $142.98, maintains a market capitalization of nearly $40 billion and has shown a solid 9.8% return over the past year.
The firm adjusted its same-store sales estimates ahead of Yum! Brands’ upcoming earnings report, projecting Taco Bell at +5%, KFC at +3%, and Pizza Hut at 0%, compared to consensus estimates of +5%, +2%, and 0%, respectively.
Guggenheim noted that Yum! Brands faces challenges in two smaller segments of its business—KFC U.S. and Pizza Hut U.S.—though KFC has recently shown improved same-store sales performance due to better brand management and new product introductions.
The firm highlighted that Pizza Hut U.S. is experiencing additional pressure from Domino’s aggressive promotional activities, which has impacted performance.
Despite lowering the price target, Guggenheim maintained its Buy rating, attributing the target reduction to softness in limited-service franchisor multiples across the industry.
In other recent news, Yum! Brands has been the focus of several analyst updates and internal changes. RBC Capital initiated coverage on Yum! Brands with a Sector Perform rating and a price target of $165. Analyst Logan Reich noted that the current risk/reward balance does not justify an Outperform rating at present levels. Piper Sandler raised its price target for Yum! Brands to $157 from $155, maintaining a Neutral rating after analyzing recent trends in the KFC U.S. and Pizza Hut U.S. systems. Meanwhile, Goldman Sachs reiterated its Buy rating with a $167 price target, despite recent stock movement.
In leadership updates, Yum! Brands announced strategic appointments ahead of Chris Turner’s transition to Chief Executive Officer on October 1. Sean Tresvant has been promoted to Chief Consumer Officer while continuing as CEO of Taco Bell, where he has consistently delivered positive same-store sales growth. Additionally, KFC US appointed Melissa Cash as Chief Marketing Officer, where she will lead the brand’s marketing strategy. These developments reflect Yum! Brands’ ongoing efforts to strengthen its leadership team.
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