Yum! Brands stock hits all-time high of $151.37 amid robust growth

Yum! Brands Inc (NYSE:YUM), the global fast-food giant, has reached an all-time high, with its stock price soaring to $151.37. According to InvestingPro data, the company’s current valuation appears stretched, with the stock trading at nearly 28.5x earnings and showing overbought signals. This milestone underscores the company’s strong performance and resilience in the fast-food industry. Over the past year, Yum! Brands has seen its stock value increase by 10.7%, with a notable 12.5% gain year-to-date. The company maintains a solid 47.5% gross profit margin and has consistently paid dividends for 22 consecutive years, currently yielding 1.9%. The achievement of this all-time high represents a significant moment for shareholders and the company alike, signaling a positive outlook for its portfolio of brands, which includes KFC, Pizza Hut, and Taco Bell. For deeper insights into Yum! Brands’ valuation and growth prospects, including 8 additional exclusive ProTips, check out the comprehensive research report available on InvestingPro.

In other recent news, Yum! Brands reported its fourth-quarter earnings for 2024, meeting analysts’ expectations with an earnings per share (EPS) of $1.61 and revenue of $2.36 billion. The company’s financial performance was bolstered by a 5% growth in system-wide sales and a significant increase in digital sales, which surpassed $30 billion. Bank of America Securities raised its price target for Yum! Brands to $153, while maintaining a Neutral rating, following the company’s better-than-expected same-store sales growth. BMO Capital Markets also adjusted its price target to $139, citing the company’s strong brand momentum and recovery in the Middle East market.

Yum! Brands opened over 4,500 new units in 2024, with KFC leading the way by opening a record 2,900 units across 97 countries. Despite these successes, the company plans to close 538 units in the first quarter of 2025, primarily in Turkiye, reflecting ongoing challenges with Pizza Hut locations in the U.S. and Latin America. Analysts at BMO Capital Markets anticipate that Yum! Brands will achieve algorithmic operating profit growth in 2025, although they note potential risks from a competitive environment.

The company’s strategic focus on digital innovation and international expansion has been a key driver of its steady growth. Yum! Brands returned $1.2 billion to shareholders through dividends and buybacks, indicating strong shareholder value. Despite the positive outlook, the company faces challenges in unit development and brand-specific issues, particularly with Pizza Hut, which may impact future growth.

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