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Investing.com - Evercore ISI has reduced its price target on Yum! Brands stock (NYSE:YUM) to $165.00 from $170.00 while maintaining its "In Line" rating. The stock, currently trading at $139.50 with a market capitalization of $38.8 billion, appears fairly valued according to InvestingPro analysis.
The adjustment comes as Evercore ISI anticipates higher near-term overhead expenses for the fast-food restaurant company, which operates popular chains including KFC, Taco Bell, and Pizza Hut.
Despite the price target reduction, the research firm notes that Yum! Brands appears positioned for high-single-digit profit growth and low- to mid-teens total return, combining earnings per share growth and dividends, in both 2025 and 2026.
This growth outlook is primarily fueled by solid ongoing performance from Taco Bell and KFC International operations, which together represent approximately 85% of the company’s operating profit, according to Evercore ISI.
The firm also highlighted Yum! Brands’ 4% annual cash return to shareholders through dividends and share repurchases, while expressing interest in how the company might leverage its internal technology capabilities, specifically its "Byte" platform, to support future growth.
In other recent news, Yum! Brands reported its second-quarter earnings, revealing an earnings per share (EPS) of $1.44, which was slightly below the forecasted $1.46. The company’s revenue came in at $1.93 billion, missing the expected $1.94 billion. This earnings miss led to a price target adjustment by Wells Fargo (NYSE:WFC), which lowered its target from $160.00 to $155.00 while maintaining an Equal Weight rating. Yum! Brands experienced global comparable sales growth of 2%, which was approximately 30 basis points below Street expectations and showed a 100 basis point slowdown from the first quarter. Taco Bell, a segment of Yum! Brands, reported 4% comparable sales growth, driven by products like Crispy Chicken and Refrescas, despite a 500 basis point slowdown from the previous quarter. These developments reflect the company’s recent financial performance and market dynamics.
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