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Yum! Brands
(NYSE:YUM)
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Rating:71Outperform
Price Target:
$168.00
▲(12.81% Upside)
Action:Reiterated
Date:08/07/26
Overall score reflects strong profitability and cash generation as the primary positives, reinforced by upbeat guidance and operational momentum from the latest earnings call. The rating is tempered by elevated leverage/negative equity on the balance sheet and only neutral-to-soft technical momentum; valuation appears reasonable but not deeply discounted.
Positive Factors
Strong margins and cash generation
Yum's high, sustained margins and recurring free cash flow reflect durable franchise economics tied to royalties and scale. Consistent FCF (~$1.68B TTM) supports reinvestment, buybacks and deleveraging, underpinning long-term financial resilience and funding strategic initiatives.
Negative Factors
Elevated leverage and negative equity
Material debt and persistent negative equity leave Yum exposed to refinancing and interest-rate risk and reduce strategic flexibility. Elevated leverage can constrain acquisitions, capex pacing or dividend policy if cash flow weakens or rates rise, increasing downside in stressed scenarios.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong margins and cash generation
Yum's high, sustained margins and recurring free cash flow reflect durable franchise economics tied to royalties and scale. Consistent FCF (~$1.68B TTM) supports reinvestment, buybacks and deleveraging, underpinning long-term financial resilience and funding strategic initiatives.
Read all positive factors
Yum! Brands Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much each business unit contributes to total sales, indicating which segments are growing or declining and their impact on overall performance.
Shows how much each business unit contributes to total sales, indicating which segments are growing or declining and their impact on overall performance.
Data provided by:
The Fly
The FlyYum! Brands (YUM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$40.42B
Dividend Yield1.97%
Average Volume (3M)2.61M
Price to Earnings (P/E)18.5
Beta (1Y)0.34
Revenue Growth10.28%
EPS Growth56.85%
CountryUS
Employees49,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)8.01
Shares Outstanding272,901,100
10 Day Avg. Volume3,073,688
30 Day Avg. Volume2,607,227
Financial Highlights & Ratios
PEG Ratio4.61
Price to Book (P/B)-5.74
Price to Sales (P/S)5.12
P/FCF Ratio25.66
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$174.82Price Target Upside17.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)6.59
Revenue Forecast (FY)$9.01B
Yum! Brands Business Overview & Revenue Model
Company Description
YUM! Brands, Inc. (YUM) is a leading global quick-service restaurant enterprise that focuses on the creation, management, and franchising of its restaurant concepts internationally. Its business is organized into four main divisions: KFC, Taco Bel...
How the Company Makes Money
Yum! Brands makes money primarily through a franchise-led model across its major brands (KFC, Taco Bell, and Pizza Hut). Key revenue streams include: (1) Franchise royalties: ongoing fees typically calculated as a percentage of franchisee restaura...
Yum! Brands Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed a largely positive outlook driven by robust unit development, digital acceleration, KFC momentum, Taco Bell loyalty and strong H1 financial performance (7% system sales growth ex. Pizza Hut; digital sales +25% YoY). The principal near-term weakness is a meaningful but described-as-temporary U.S. Taco Bell sales disruption tied to an industry food-safety issue that has pressured short-term margins and caused QTD comp declines (‑2% through July 27 and sharper day-level drops at the peak). Management emphasized recovery actions, strong brand fundamentals and capital deployment plans (including a $2.7B Pizza Hut sale and $670M of buybacks YTD), leaving the tone optimistic about long-term growth while acknowledging short-term headwinds.Positive Updates
Strong consolidated top-line performance (ex. Pizza Hut)
Excluding Pizza Hut, Q2 system sales grew 7%, driven by 6% unit growth and 4% same-store sales growth. First half results capped a solid H1 with continued development and comps strength across brands.
Negative Updates
Taco Bell U.S. near-term sales impact from industry food-safety issue
Quarter-to-date through July 27, Taco Bell U.S. same-store sales were down 2%. Management reported a peak sales impact around July 18 and described a maximum near-term decline in impacted periods that approached the ~20% range before steady recovery began; recent multi-day averages show meaningful improvement but recovery is still in early days.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong consolidated top-line performance (ex. Pizza Hut)
Excluding Pizza Hut, Q2 system sales grew 7%, driven by 6% unit growth and 4% same-store sales growth. First half results capped a solid H1 with continued development and comps strength across brands.
Read all positive updates
Company Guidance
Yum! updated guidance that Taco Bell U.S. quarter‑to‑date same‑store sales through July 27 were down 2% (peak impact July 18 with steady improvement since and the most recent four‑day average about halfway back to prior‑year levels) and that Taco Bell's Q3 equity store‑level margins are expected to be 19–21% (reflecting lower but improving volumes, promotional investment and concentration in more impacted markets); management reiterated that first‑half results excluding Pizza Hut met or exceeded every element of its algorithm and that it had been highly confident of meeting or exceeding the full‑year algorithm prior to the recent issue. They expect the Pizza Hut transactions (aggregate $2.7B upfront to Yum China and LongRange Capital plus up to $75M earnout by 2030) to close in August, anticipate net proceeds of roughly $2.3B to pay down the revolver and fund share repurchases, will receive about $2.5M/month in transition service fees through year‑end (phasing out in 2027), noted H1 share repurchases of ≈$670M, and continue to target disciplined G&A (pro forma ~1.7% of system sales).Yum! Brands Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
28
Negative
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.72B | 8.21B | 7.55B | 7.08B | 6.84B | 6.58B |
| Gross Profit | 4.00B | 3.79B | 3.58B | 3.50B | 3.31B | 3.17B |
| EBITDA | 2.88B | 2.78B | 2.56B | 2.48B | 2.33B | 2.38B |
| Net Income | 2.22B | 1.56B | 1.49B | 1.60B | 1.32B | 1.57B |
Balance Sheet | ||||||
| Total Assets | 8.68B | 8.20B | 6.73B | 6.23B | 5.85B | 5.97B |
| Cash, Cash Equivalents and Short-Term Investments | 674.00M | 709.00M | 707.00M | 512.00M | 587.00M | 486.00M |
| Total Debt | 12.28B | 11.91B | 12.29B | 12.03B | 12.66B | 12.13B |
| Total Liabilities | 15.79B | 15.52B | 14.38B | 14.09B | 14.72B | 14.34B |
| Stockholders Equity | -7.11B | -7.33B | -7.65B | -7.86B | -8.88B | -8.37B |
Cash Flow | ||||||
| Free Cash Flow | 1.68B | 1.64B | 1.43B | 1.32B | 1.15B | 1.48B |
| Operating Cash Flow | 2.08B | 2.01B | 1.69B | 1.60B | 1.43B | 1.71B |
| Investing Cash Flow | -1.04B | -1.00B | -422.00M | -107.00M | -202.00M | -173.00M |
| Financing Cash Flow | -940.00M | -924.00M | -1.16B | -1.43B | -1.32B | -1.77B |
Yum! Brands Technical Analysis
Negative
148.92
Price Trends
153.39
Negative
154.21
Negative
153.51
Negative
Market Momentum
-1.47
Positive
45.17
Neutral
51.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUM, the sentiment is Negative. The current price of 148.92 is below the 20-day moving average (MA) of 149.50, below the 50-day MA of 153.39, and below the 200-day MA of 153.51, indicating a bearish trend. The MACD of -1.47 indicates Positive momentum. The RSI at 45.17 is Neutral, neither overbought nor oversold. The STOCH value of 51.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for YUM.
Yum! Brands Risk Analysis
Yum! Brands disclosed 29 risk factors in its most recent earnings report. Yum! Brands reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Yum! Brands Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $25.58B | 21.53 | 56.01% | 3.12% | 9.39% | 17.16% | |
73 Outperform | $42.39B | 30.73 | 53.26% | ― | 7.31% | -4.37% | |
71 Outperform | $40.42B | 18.49 | -30.35% | 1.96% | 10.28% | 56.85% | |
68 Neutral | $193.07B | 22.11 | -561.20% | 2.78% | 6.30% | 5.37% | |
65 Neutral | $11.46B | 19.56 | -15.15% | 2.24% | 5.16% | 2.13% | |
62 Neutral | $122.77B | 61.89 | -24.31% | 2.39% | 4.51% | -24.97% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
YUM
Yum! Brands
148.11
1.59
1.08%
CMG
Chipotle
33.50
-9.88
-22.78%
DRI
Darden Restaurants
225.26
26.17
13.14%
DPZ
Domino's Pizza
346.27
-90.17
-20.66%
MCD
McDonald's
272.83
-28.56
-9.48%
SBUX
Starbucks
107.69
17.45
19.34%
Yum! Brands Corporate Events
Business Operations and StrategyM&A Transactions
Yum! Brands completes Pizza Hut China divestiture deal
Positive
Aug 7, 2026
On August 7, 2026, Yum! Brands completed the previously announced sale of its Pizza Hut business in Mainland China to Yum China Holdings for $1.2 billion in cash, formalizing the transfer of rights that Yum China had previously held as an exclusiv...
Business Operations and StrategyStock BuybackM&A Transactions
Yum! Brands Divests Pizza Hut, Boosts Share Buybacks
Positive
Jun 16, 2026
On June 16, 2026, Yum! Brands agreed to sell its global Pizza Hut business outside mainland China to Toppings TopCo, LLC for $1.488 billion in cash, plus up to $75 million in earn-out payments, in a transaction structured as an equity sale of mult...
Business Operations and StrategyStock BuybackM&A Transactions
Yum! Brands Divests Pizza Hut, Boosts Share Buybacks
Positive
Jun 16, 2026
On June 16, 2026, Yum! Brands announced definitive agreements to sell its Pizza Hut business for a total of $2.7 billion, with Pizza Hut operations outside Mainland China going to private equity firm LongRange Capital and the Mainland China busine...
Executive/Board Changes
Yum! Brands Announces Leadership Transition for COO Role
Neutral
Jun 2, 2026
On June 2, 2026, Yum! Brands, Inc. announced that Chief Operating Officer and Chief People Culture Officer Tracy Skeans will step down from these roles effective November 1, 2026, and then serve as a Senior Advisor until her planned retirement on...
Executive/Board ChangesShareholder Meetings
Yum! Brands Shareholders Back Board, Governance Structure
Positive
May 19, 2026
At its Annual Meeting of Shareholders held on May 14, 2026, Yum! Brands, Inc. shareholders elected all nominated directors, including Paget L. Alves, M. Brett Biggs, Brian C. Cornell, Tanya L. Domier, Susan Doniz, Mirian M. Graddick-Weir, Thomas C...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.