YUM Yum! Brands, Inc. - Fundamental Analysis
BULLISH
YUM Stock | Fundamental Analysis & Investment Insights
NYSE
•
Consumer Cyclical
•
Restaurants
Current Price
$149.02
Analyst Target
$164.64
+10.5% Upside
52W High
$163.3
52W Low
$122.13
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
85%
Analysis Accuracy
Yum! Brands presents a compelling investment case supported by strong profitability, consistent earnings growth, and a favorable valuation relative to the Consumer Cyclical sector. Despite recent insider selling, the company continues to deliver robust operating margins (34.41%) and ROA (24.03%), outperforming sector averages in efficiency and margin discipline. The stock trades at a forward P/E of 24.51, below the sector’s 49.07 average, while offering a 1.91% dividend yield with a sustainable 54.6% payout ratio. Analysts are aligned with a 'buy' recommendation and a $164.64 target, implying 10.5% upside, supported by accelerating YoY EPS growth of 17.0% and improving quarterly momentum.
Key Strengths
Operating margin of 34.41% significantly exceeds sector average of 13.92%, reflecting pricing power and franchise model efficiency
ROA of 24.03% demonstrates superior asset utilization compared to sector peers
Forward P/E of 24.51 is 50% below sector average (49.07), offering valuation cushion
Revenue growth of 8.40% YoY outpaces key peers like Hilton (3.5%) and Lululemon (6.5%)
Dividend yield of 1.91% with a sustainable 54.6% payout ratio provides income stability
Key Risks
Price/Book ratio of -5.52 indicates negative book value, raising concerns about accumulated debt or intangible asset overhang
Insider selling activity totaling $4.92M over the past 6 months signals potential lack of confidence among executives
Limited visibility on cash flow metrics (Free Cash Flow, Operating Cash Flow missing) creates opacity in capital allocation flexibility
Earnings volatility evident in recent quarters with 2 misses in last 4, including a -10.1% surprise in Feb 2024
Sector-wide headwinds in consumer discretionary spending could pressure same-store sales growth
AI Fair Value Estimate
Based on comprehensive analysis
$164.64
+10.5% above current price
Performance Snowflake
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Stock Price & Analyst Targets
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Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
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Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
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Insider Trading & Analyst Ratings
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