Yum! Brands (YUM)
NYSE:YUM
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Yum! Brands
(NYSE:YUM)
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Rating:71Outperform
Price Target:
$171.00
▲(5.04% Upside)
Action:Upgraded
Date:06/17/26
The score is driven primarily by strong profitability and free-cash-flow generation, supported by a constructive earnings-call outlook (unit growth, digital scale, and Taco Bell/KFC strength). The rating is held back by meaningful balance-sheet leverage/negative equity, a valuation that is not particularly cheap, and mixed technical momentum (slightly negative MACD and elevated stochastics).
Positive Factors
High operating profitability
Sustained high gross and EBIT margins reflect strong brand pricing power and low-cost franchised revenue mix. Durable margins support reinvestment, dividends and buybacks, and provide a structural buffer versus commodity volatility across multiple markets and formats.
Negative Factors
Elevated leverage and negative equity
Persistent high debt and negative shareholders' equity constrain financial flexibility and raise refinancing and covenant risk in stress scenarios. Even with steady cash flow, elevated leverage increases sensitivity to higher interest costs and limits strategic optionality for M&A or heavy reinvestment.
Read all positive and negative factors
Positive Factors
Negative Factors
High operating profitability
Sustained high gross and EBIT margins reflect strong brand pricing power and low-cost franchised revenue mix. Durable margins support reinvestment, dividends and buybacks, and provide a structural buffer versus commodity volatility across multiple markets and formats.
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
$41.89B
Dividend Yield1.84%
Average Volume (3M)2.10M
Price to Earnings (P/E)24.2
Beta (1Y)0.30
Revenue Growth9.65%
EPS Growth23.32%
CountryUS
Employees49,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)6.25
Shares Outstanding275,621,220
10 Day Avg. Volume2,430,816
30 Day Avg. Volume2,096,733
Financial Highlights & Ratios
PEG Ratio4.59
Price to Book (P/B)-5.74
Price to Sales (P/S)5.12
P/FCF Ratio25.66
Enterprise Value/Market Cap1.28
Enterprise Value/Revenue6.33
Enterprise Value/Gross Profit13.87
Enterprise Value/Ebitda18.42
Forecast
1Y Price Target
$174.36Price Target Upside7.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)6.78
Revenue Forecast (FY)$9.19B
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:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call highlighted broad company momentum: solid top-line growth, strong unit development, notable Taco Bell and KFC performance, accelerating digital mix (~63% digital) and promising innovation/AI deployments. Profitability excluding Pizza Hut grew strongly (core operating profit +10% ex-Pizza Hut) and management signaled improved margin outlooks and disciplined capital allocation (share buybacks, manageable capex). Offsetting risks include ongoing inflationary pressure (notably beef impacting The Habit), increased G&A and franchise investments, regional supply-chain impacts tied to the Middle East conflict, and a strategic review and investment drag at Pizza Hut. Overall, the positive operational and financial metrics substantially outweigh the challenges described, with management expressing confidence in execution and growth levers.Positive Updates
Solid Top-Line and Store Growth
Q1 system sales grew 6%, new units grew 5%, and global same-store sales were up 3%. The company opened 130 new stores in the quarter.
Negative Updates
Pizza Hut Strategic Review and Investment Costs
Pizza Hut is undergoing a strategic options review (on track to complete in 2026). Q1 results included Hut Forward investment expenses; Q2 core operating profit for Pizza Hut is anticipated to be approximately $70 million, and the brand's results continue to be treated separately in some metrics.
Read all updates
Q1-2026 Updates
Positive
Negative
Solid Top-Line and Store Growth
Q1 system sales grew 6%, new units grew 5%, and global same-store sales were up 3%. The company opened 130 new stores in the quarter.
Read all positive updates
Company Guidance
Yum! issued several specific forward-looking metrics: Taco Bell U.S. restaurant‑level margins are now expected to be 24.5%–25.5% for the year; full‑year ex‑special G&A growth (excluding Pizza Hut) is expected to be up mid‑single digits with Q2 ex‑special ex‑Pizza Hut G&A running high‑single‑digit YoY growth due to project timing; amortization of reacquired franchise rights is forecast to rise by ~$30 million; Habit will incur roughly $5 million of non‑cash closure expenses; Pizza Hut Q2 core operating profit is expected to be about $70 million; full‑year interest expense is guided to $510–$520 million (excluding new debt issuances); the company finished Q1 with ~3.8x net leverage while targeting a ~4.0x leverage framework and highlighted a cash generation capacity of >$2.5 billion annually (operating cash flow run‑rate ~ $1.8 billion); Q1 gross capex was $75 million and the company repurchased ~1.2 million shares for ~$185 million.Yum! Brands Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
32
Negative
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.48B | 8.21B | 7.55B | 7.08B | 6.84B | 6.58B |
| Gross Profit | 3.88B | 3.79B | 3.58B | 3.50B | 3.31B | 3.17B |
| EBITDA | 2.92B | 2.78B | 2.56B | 2.48B | 2.33B | 2.38B |
| Net Income | 1.74B | 1.56B | 1.49B | 1.60B | 1.32B | 1.57B |
Balance Sheet | ||||||
| Total Assets | 8.21B | 8.20B | 6.73B | 6.23B | 5.85B | 5.97B |
| Cash, Cash Equivalents and Short-Term Investments | 689.00M | 709.00M | 707.00M | 512.00M | 587.00M | 486.00M |
| Total Debt | 11.95B | 11.91B | 12.29B | 12.03B | 12.66B | 12.13B |
| Total Liabilities | 15.49B | 15.52B | 14.38B | 14.09B | 14.72B | 14.34B |
| Stockholders Equity | -7.28B | -7.33B | -7.65B | -7.86B | -8.88B | -8.37B |
Cash Flow | ||||||
| Free Cash Flow | 1.65B | 1.64B | 1.43B | 1.32B | 1.15B | 1.48B |
| Operating Cash Flow | 2.02B | 2.01B | 1.69B | 1.60B | 1.43B | 1.71B |
| Investing Cash Flow | -1.08B | -1.00B | -422.00M | -107.00M | -202.00M | -173.00M |
| Financing Cash Flow | -856.00M | -924.00M | -1.16B | -1.43B | -1.32B | -1.77B |
Yum! Brands Technical Analysis
Negative
162.79
Price Trends
154.23
Negative
156.35
Negative
151.83
Positive
Market Momentum
0.25
Negative
49.04
Neutral
58.46
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 162.79 is above the 20-day moving average (MA) of 151.44, above the 50-day MA of 154.23, and above the 200-day MA of 151.83, indicating a neutral trend. The MACD of 0.25 indicates Negative momentum. The RSI at 49.04 is Neutral, neither overbought nor oversold. The STOCH value of 58.46 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $41.89B | 24.22 | -23.33% | 1.84% | 9.65% | 23.32% | |
71 Outperform | $24.45B | 22.38 | 50.71% | 3.06% | 8.51% | 6.66% | |
67 Neutral | $197.95B | 22.82 | -433.90% | 2.31% | 6.76% | 6.96% | |
65 Neutral | $41.68B | 29.04 | 48.45% | ― | 5.67% | -4.28% | |
64 Neutral | $114.71B | 76.68 | -18.33% | 2.88% | 5.88% | -52.37% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $10.39B | 17.85 | -15.04% | 1.63% | 5.17% | -0.62% |
* Consumer Cyclical Sector Average
YUM
Yum! Brands
151.99
13.27
9.56%
CMG
Chipotle
32.49
-21.29
-39.59%
DRI
Darden Restaurants
213.45
-1.32
-0.61%
DPZ
Domino's Pizza
312.47
-136.48
-30.40%
MCD
McDonald's
278.61
-4.05
-1.43%
SBUX
Starbucks
100.65
10.69
11.88%
Yum! Brands Corporate Events
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...
Executive/Board Changes
Yum! Brands Adds Kathleen Oberg to Board of Directors
Positive
Apr 1, 2026
On March 26, 2026, Yum! Brands, Inc. announced that its Board of Directors had appointed Kathleen K. Oberg as a director, with the appointment effective April 1, 2026, and she is expected to stand for election by shareholders at the company’...
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.