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Investing.com - Melius Research initiated coverage on Yum! Brands (NYSE:YUM) with a Buy rating and a price target of $200.00 on Monday, representing a potential 33% upside from the current price of $149.79. According to InvestingPro data, the company maintains a "GOOD" financial health score, supported by consistent dividend payments for 22 consecutive years.
The research firm highlighted Yum! Brands’ global growth strategy, noting the company is leveraging scale and technology to drive expansion across its restaurant portfolio, which includes KFC, Taco Bell, Pizza Hut, and Habit Burger. This strategy has yielded impressive results, with revenue growing 10.09% over the last twelve months.
Melius pointed to the company’s capital-light business model and digital investments as key factors improving franchisee economics and customer experience, creating what it describes as a "compounding growth engine."
The firm identified the Byte by Yum! technology platform as a potential new revenue stream, suggesting long-term opportunities to license this technology beyond Yum’s own restaurant system.
Despite acknowledging ongoing macroeconomic headwinds, Melius expressed confidence in the portfolio’s resilience, technology-driven margin expansion, and emerging platform monetization opportunities to drive sustained system sales growth.
In other recent news, Yum! Brands reported its first-quarter 2025 earnings, highlighting a steady growth trajectory with an earnings per share (EPS) of $1.30, slightly surpassing the forecast of $1.28. However, the company’s revenue fell short of expectations, coming in at $1.79 billion compared to the anticipated $1.85 billion. The mixed financial performance was marked by Taco Bell’s strong same-store sales growth of 9% and KFC’s 2% increase, while Pizza Hut experienced a 2% decrease. In another development, Redburn-Atlantic upgraded Yum! Brands’ stock from Neutral to Buy, raising the price target to $177, citing optimism about the company’s growth prospects and strong financial position. Additionally, JPMorgan increased its price target for Yum! Brands to $170, maintaining a Neutral rating. Yum! Brands also announced a quarterly cash dividend of $0.71 per share, demonstrating its commitment to returning value to shareholders. Furthermore, Chris Turner has been named the new CEO of Yum! Brands, effective October 1, 2025, succeeding David Gibbs. These recent developments reflect Yum! Brands’ strategic initiatives and ongoing efforts to bolster its growth trajectory.
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