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Investing.com - TD Cowen has reduced its price target on Yum! Brands (NYSE:YUM) to $156 from $158 while maintaining a Hold rating on the stock. The company, currently trading at $141.32, has seen 8 analysts revise their earnings estimates downward for the upcoming period, according to InvestingPro data.
The research firm attributed the negative stock reaction to Taco Bell’s same-store sales, which were solid but missed both TD Cowen’s and consensus estimates. The company also reported softer-than-expected second-quarter development and provided guidance indicating that core operating profit growth would be weighted toward the fourth quarter. Despite market volatility, InvestingPro analysis shows YUM maintains relatively low price volatility, with a beta of 0.73.
TD Cowen noted some positive signals, indicating that Taco Bell sales have improved quarter-to-date. The firm also highlighted that the brand has a strong menu and marketing calendar planned for the second half of 2025.
Based on these factors, TD Cowen has lowered its 2025 earnings per share estimate for Yum! Brands by 1%, resulting in the $2 reduction in price target to $156.
Yum! Brands operates global restaurant chains including KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill, with over 55,000 restaurants worldwide.
In other recent news, Yum! Brands reported its second-quarter earnings, revealing an earnings per share (EPS) of $1.44, slightly below the forecasted $1.46. Revenue was reported at $1.93 billion, missing the expected $1.94 billion. Despite these results, UBS maintained its Buy rating with a price target of $180.00, highlighting Taco Bell’s strong performance and market share gains. Bernstein reiterated its Market Perform rating with a $145.00 price target, noting same-store sales growth at Taco Bell and KFC International that slightly missed consensus expectations. Evercore ISI lowered its price target to $165.00 from $170.00, citing anticipated higher near-term overhead expenses. Wells Fargo (NYSE:WFC) also adjusted its price target to $155.00 from $160.00, maintaining an Equal Weight rating after Yum! Brands’ second-quarter earnings miss. The company reported global comparable sales growth of 2%, which was below expectations. Taco Bell achieved 4% comparable sales growth, driven by offerings like Crispy Chicken and Refrescas, despite a slowdown from the previous quarter.
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