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On Monday, JPMorgan analyst John Ivankoe increased the price target for Yum! Brands, which trades on the New York Stock Exchange under the ticker (NYSE:YUM), from $160.00 to $170.00 while keeping a Neutral rating on the shares. According to InvestingPro data, analyst targets for the stock range from $140 to $185, with the company currently trading near its Fair Value. Ivankoe noted that Yum! Brands’ shares have been trading above the long-established range of $120-143 since 2021, despite being down approximately 9% from the high of $163.30 reached on March 7, 2023. This decline in Yum! Brands’ stock contrasts with a smaller 1.5% drop in the S&P 500 index over the same period.
Yum! Brands’ performance in the first quarter of 2025 was marked by Taco Bell’s same-store sales (SSS), which grew by 9%, surpassing expectations and the analyst’s prediction of 8%. Meanwhile, global KFC met projections with a 2% increase, but Pizza Hut lagged with a 2% decrease in sales, falling short of the anticipated 3% growth. The company’s overall revenue growth reached 10.1% in the last twelve months, with a healthy gross profit margin of 46.8%. For deeper insights into YUM’s financial health and comprehensive analysis, investors can access the full Pro Research Report on InvestingPro.
The analyst anticipates that Taco Bell and KFC, which are primarily focused on the U.S. and international markets respectively, will contribute over 80% of Yum! Brands’ operating income for fiscal year 2025. These two segments are also expected to drive the majority of the company’s growth, with both contributing to approximately 85% of the 4% net unit growth projected for fiscal year 2025 and around 80% of the 4.6% unit growth forecast for fiscal year 2026. With an EBITDA of $2.75 billion and a market capitalization of $41.5 billion, YUM maintains a solid financial position and receives a "GOOD" overall Financial Health score from InvestingPro’s comprehensive assessment framework.
In other recent news, Yum! Brands reported its first-quarter 2025 earnings, revealing a steady growth trajectory. The company achieved an earnings per share (EPS) of $1.30, slightly surpassing the forecast of $1.28. However, revenue fell short of expectations, coming in at $1.79 billion compared to the anticipated $1.85 billion. Despite the mixed financial results, Taco Bell and KFC showed strong operating profit growth, with Taco Bell experiencing a remarkable 16% increase and KFC seeing a 9% rise. The company’s international markets are recovering, with KFC leading the charge. In terms of analyst actions, there were no specific upgrades or downgrades reported, but investor sentiment seemed cautious due to the revenue miss. Yum! Brands remains optimistic about its growth prospects, aiming for an 8% increase in core operating profit for the year.
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