Yum! Brands (YUM)
NYSE:YUM
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Yum! Brands
(NYSE:YUM)
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Rating:65Neutral
Price Target:
$167.00
▲(3.12% Upside)
Action:DowngradedDate:04/01/26
The score is driven primarily by solid operating fundamentals (steady revenue growth, strong margins, and robust free cash flow) and a generally positive earnings outlook (especially ex-Pizza Hut). These positives are tempered by elevated balance-sheet risk (high leverage and negative equity) and weaker near-term technical momentum, while valuation appears moderately expensive with only a modest dividend yield.
Positive Factors
Strong cash generation
Yum's improving operating cash flow (~$2.0B) and free cash flow (~$1.6B) provide durable internal funding for franchising, capex, dividends and buybacks. Consistent cash conversion since 2020 cushions the high leverage, enabling reinvestment and strategic execution over years.
Negative Factors
Very high leverage and negative equity
An aggressive capital structure with ~$11.9B debt and deeply negative equity materially reduces financial flexibility. Even with strong cashflow, elevated leverage raises refinancing and interest-rate sensitivity and limits ability to absorb shocks or pursue large strategic investments without raising funding costs.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Yum's improving operating cash flow (~$2.0B) and free cash flow (~$1.6B) provide durable internal funding for franchising, capex, dividends and buybacks. Consistent cash conversion since 2020 cushions the high leverage, enabling reinvestment and strategic execution over years.
Read all positive factors
Yum! Brands (YUM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$44.77B
Dividend Yield1.84%
Average Volume (3M)1.58M
Price to Earnings (P/E)27.0
Beta (1Y)0.36
Revenue Growth11.60%
EPS Growth-4.33%
CountryUS
Employees49,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)1.73
Shares Outstanding276,430,100
10 Day Avg. Volume1,158,494
30 Day Avg. Volume1,583,064
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 Cap1.24
Enterprise Value/Revenue6.73
Enterprise Value/Gross Profit14.58
Enterprise Value/Ebitda19.88
Forecast
1Y Price Target
$170.93Price Target Upside5.55% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
EPS Forecast (FY)6.68
Revenue Forecast (FY)$9.11B
Yum! Brands Business Overview & Revenue Model
Company Description
YUM! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. It operates through four segments: the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Gr...
How the Company Makes Money
Yum! Brands makes money primarily through a franchise-driven model. A large portion of its revenue is generated from franchise fees and ongoing royalties paid by franchisees, typically based on a percentage of restaurant sales, in exchange for the...
Yum! Brands Key Performance Indicators (KPIs)
Any
Number of Restaurants
Tracks the total count of operational locations, reflecting expansion efforts, market penetration, and potential for revenue growth.
Tracks the total count of operational locations, reflecting expansion efforts, market penetration, and potential for revenue growth.
Data provided by:
The Fly
The FlyYum! Brands Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call highlighted multiple strong operational and financial wins — notably robust Taco Bell performance, record KFC unit development, meaningful digital adoption and margin expansion — while acknowledging focused near-term pain points primarily at Pizza Hut (same-store sales decline, targeted closures, and one-time investments) and some market-specific disruptions (Turkey closures, integration costs). Management emphasized strategic priorities to drive higher AUVs, accelerate franchisee economics, and scale the Byte platform. On balance, the positives (broad brand momentum, digital scale, unit growth, and EPS/margin expansion) outweigh the lowlights tied mostly to one underperforming brand and localized issues.Positive Updates
Strong System Sales Growth
Q4 system sales grew 5% (driven by 3% unit growth and 3% same-store sales); full-year system sales grew 5%, led by Taco Bell (8% full-year system sales) and KFC (6% full-year system sales).
Negative Updates
Pizza Hut Underperformance and Ongoing Strategic Review
Pizza Hut reported a 1% same-store sales decline globally for Q4 and the year; strategic review underway with potential structural actions. Management expects Q1 Pizza Hut core operating profit to be down ~15% (due to one-time Hutt Forward marketing support and integration costs).
Read all updates
Q4-2025 Updates
Positive
Negative
Strong System Sales Growth
Q4 system sales grew 5% (driven by 3% unit growth and 3% same-store sales); full-year system sales grew 5%, led by Taco Bell (8% full-year system sales) and KFC (6% full-year system sales).
Read all positive updates
Company Guidance
Guidance highlights: excluding Pizza Hut, Yum expects to meet or exceed every element of its long‑term growth algorithm in 2026 — including delivering over 5% net new unit growth and roughly 8% core operating profit growth ex‑Pizza Hut — while maintaining net leverage at about 4x. Taco Bell US restaurant‑level margins are expected to be 24–25%; ex‑Pizza Hut ex‑special G&A is expected to grow mid‑single digits (including incremental overhead from the Q4 Taco Bell US store acquisition); amortization of reacquired franchise rights will increase by $30 million; interest expense is expected to be $500–$520 million; and the effective tax rate is expected to be 22–24%. For Pizza Hut specifically, Q1 core operating profit is expected to be down ~15% due to Hutt Forward marketing support and integration costs, with ~250 targeted U.S. closures in H1 and seasonally stronger gross openings in the back half as the strategic review is completed this year.Yum! Brands Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
33
Negative
Cash Flow
82
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.21B | 7.55B | 7.08B | 6.84B | 6.58B |
| Gross Profit | 3.79B | 3.58B | 3.50B | 3.31B | 3.17B |
| EBITDA | 2.78B | 2.56B | 2.48B | 2.33B | 2.38B |
| Net Income | 1.56B | 1.49B | 1.60B | 1.32B | 1.57B |
Balance Sheet | |||||
| Total Assets | 8.20B | 6.73B | 6.23B | 5.85B | 5.97B |
| Cash, Cash Equivalents and Short-Term Investments | 709.00M | 707.00M | 512.00M | 587.00M | 486.00M |
| Total Debt | 11.91B | 12.29B | 12.03B | 12.66B | 12.13B |
| Total Liabilities | 15.52B | 14.38B | 14.09B | 14.72B | 14.34B |
| Stockholders Equity | -7.33B | -7.65B | -7.86B | -8.88B | -8.37B |
Cash Flow | |||||
| Free Cash Flow | 1.64B | 1.43B | 1.32B | 1.15B | 1.48B |
| Operating Cash Flow | 2.01B | 1.69B | 1.60B | 1.43B | 1.71B |
| Investing Cash Flow | -1.00B | -422.00M | -107.00M | -202.00M | -173.00M |
| Financing Cash Flow | -924.00M | -1.16B | -1.43B | -1.32B | -1.77B |
Yum! Brands Technical Analysis
Positive
161.94
Price Trends
159.97
Positive
155.72
Positive
150.44
Positive
Market Momentum
0.60
Negative
58.36
Neutral
94.83
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUM, the sentiment is Positive. The current price of 161.94 is above the 20-day moving average (MA) of 158.05, above the 50-day MA of 159.97, and above the 200-day MA of 150.44, indicating a bullish trend. The MACD of 0.60 indicates Negative momentum. The RSI at 58.36 is Neutral, neither overbought nor oversold. The STOCH value of 94.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $217.57B | 25.46 | -336.89% | 2.31% | 1.26% | 2.87% | |
71 Outperform | $22.87B | 20.24 | 50.71% | 3.06% | 8.61% | 9.39% | |
67 Neutral | $45.91B | 32.22 | 47.00% | ― | 7.31% | 5.26% | |
67 Neutral | $12.38B | 23.81 | -15.28% | 1.63% | 3.92% | 4.98% | |
65 Neutral | $44.77B | 26.98 | -20.57% | 1.84% | 11.60% | -4.33% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
51 Neutral | $112.04B | 83.00 | -17.22% | 2.88% | 2.80% | -50.71% |
* Consumer Cyclical Sector Average
YUM
Yum! Brands
161.94
21.34
15.17%
CMG
Chipotle
35.25
-12.92
-26.82%
DRI
Darden Restaurants
199.68
5.41
2.78%
DPZ
Domino's Pizza
368.07
-90.89
-19.80%
MCD
McDonald's
306.26
2.00
0.66%
SBUX
Starbucks
98.34
19.03
23.99%
Yum! Brands Corporate Events
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’...
Executive/Board Changes
Yum! Brands Announces Board Resignation Amid Routine Refresh
Neutral
Feb 12, 2026
On February 10, 2026, Yum! Brands Inc. announced that board member Keith Barr resigned from the Board of Directors, effective the same day. The company stated that Barr’s departure was not due to any disagreement over operations, policies, o...
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.