Yum! Brands, Inc.
YUM
$0.00
-1.14%
Yum! Brands is a global restaurant company operating iconic brands like KFC, Pizza Hut, and Taco Bell. It is the world's second-largest restaurant firm by sales, defined by its highly franchised, asset-light business model focused on recurring royalties.
YUM
Yum! Brands, Inc.
$0.00
Related headlines
Investment Opinion: Should I buy YUM Today?
Based on a synthesis of the fundamental strength, analyst sentiment, and current valuation, the objective assessment is a Hold. The company's underlying business is excellent, characterized by a superior franchise model, strong margins, and reliable cash flow. However, at a current price of $155.48, the stock trades at a premium (forward P/E of 20.8) with only a 10.5% implied upside to the average analyst target. This suggests most of the near-term value has been captured, making it less compelling for new capital deployment at this level despite its quality.
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YUM 12-Month Price Forecast
YUM is a high-quality company trading at a fair-to-full valuation. The 12-month outlook is balanced, with moderate upside potential capped by its current price level, warranting a neutral stance.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Yum! Brands, Inc.'s 12-month outlook, with a consensus price target around $0.00 and implied upside of — versus the current price.
Average Target
$0.00
6 analysts
Implied Upside
—
vs. current price
Analyst Count
6
covering this stock
Price Range
$0 - $0
Analyst target range
Wall Street analysts maintain a generally positive outlook. The consensus recommendation is 'Buy' with a mean rating of 2.27 (on a scale where 1.0 is Strong Buy). The average 12-month price target from 24 analysts is $171.75, representing a potential upside of approximately 10.5% from the current price. The target range is wide, spanning from a low of $147 to a high of $200.
Bulls vs Bears: YUM Investment Factors
YUM presents a mixed but leaning positive picture. Its asset-light, high-margin franchise model drives strong profitability and cash generation, which is highly attractive. However, its current valuation is not cheap, and the stock faces near-term headwinds from market volatility and its cyclical nature.
Bullish
- Strong Franchise Model: 98% franchised model ensures high margins and stable cash flow.
- Robust Profitability: High net margin of 19.0% and ROA of 22.6% indicate efficiency.
- Healthy Cash Flow: TTM free cash flow of $1.64B supports dividends and buybacks.
- Analyst Consensus Buy: 24 analysts rate it Buy with a $171.75 average target price.
Bearish
- High Valuation Multiples: Trailing P/E of 28.0 and P/S of 5.26 appear elevated.
- Recent Price Weakness: Stock down 7.54% in the last month, underperforming the market.
- Consumer Cyclical Exposure: Sensitive to economic downturns affecting discretionary spending.
- Intense Competition: Operates in a highly competitive global restaurant industry.
YUM Technical Analysis
Overall Assessment: The stock has shown a positive trend over the past six months, rising from approximately $151 in early October 2025 to $155.48 by March 31, 2026, representing a 2.73% gain. This performance notably outpaced the broader market, as indicated by a positive 6-month relative strength of 5.55.
Short-term Performance: Over the last month, the stock declined by 7.54%, underperforming the S&P 500's 5.25% drop. However, it posted a 2.78% gain over the last three months, significantly outperforming the S&P 500's 4.63% decline during the same period.
Current Position: The current price of $155.48 sits near the middle of its 52-week range of $137.33 to $169.39, approximately 9.2% below its 52-week high. The price data shows recent volatility, with the stock reaching a recent peak near $168 in late February before pulling back.
Beta
0.64
0.64x market volatility
Max Drawdown
-15.0%
Largest decline past year
52-Week Range
$137-$169
Price range past year
Annual Return
-3.3%
Cumulative gain past year
| Period | YUM Return | S&P 500 |
|---|---|---|
| 1m | -5.7% | -3.7% |
| 3m | +1.6% | -4.1% |
| 6m | +2.0% | -2.1% |
| 1y | -3.3% | +16.1% |
| ytd | +2.1% | -3.9% |
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YUM Fundamental Analysis
Revenue & Profitability: The company reported Q4 2025 revenue of $2.51 billion, representing a year-over-year growth of 6.44%. Profitability remains strong, with a quarterly net margin of 21.3% and a trailing twelve-month net margin of 19.0%, supported by a solid operating margin of 31.9%.
Financial Health: The company maintains a healthy current ratio of 1.35, indicating sufficient short-term liquidity. Free cash flow generation is robust, with TTM free cash flow reported at $1.64 billion, providing ample resources for dividends, share repurchases, and investments.
Operational Efficiency: The company demonstrates high operational efficiency with a strong Return on Assets (ROA) of 22.6%. Its highly franchised model (98% of stores) drives asset-light operations and consistent cash flow from royalties and marketing fees.
Quarterly Revenue
$2.5B
2025-12
Revenue YoY Growth
+0.06%
YoY Comparison
Gross Margin
+0.44%
Latest Quarter
Free Cash Flow
$1.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is YUM Overvalued?
Valuation Level: With positive net income, the primary valuation metric is the Price-to-Earnings (P/E) ratio. The stock trades at a trailing P/E of 28.0 and a forward P/E of 20.8. The forward P/E suggests a more moderate valuation based on expected earnings growth.
Peer Comparison: Data not available for direct industry average comparisons. However, the valuation can be contextualized by other metrics: the Price-to-Sales (P/S) ratio is 5.26, and the Enterprise Value-to-Sales (EV/Sales) is 6.75. The dividend yield is 1.93% with a payout ratio of 51.2%.
PE
27.0x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 17x~44x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
19.1x
Enterprise Value Multiple
Investment Risk Disclosure
YUM's primary risks stem from its market positioning and financial structure. As a consumer cyclical company, its performance is tied to global economic health; a recession could significantly impact discretionary spending at its KFC, Pizza Hut, and Taco Bell chains. Operationally, intense competition and potential brand-specific issues (e.g., food safety, changing consumer tastes) pose constant threats. Financially, while the company is healthy, its valuation multiples (P/E of 28, P/S of 5.26) are high, making the stock vulnerable to multiple compression if growth slows or earnings disappoint. The high short ratio of 3.71 also indicates a notable level of market skepticism. Furthermore, its significant international footprint (70% of locations) exposes it to foreign exchange fluctuations and geopolitical risks.
FAQ
Key risks include economic sensitivity as a consumer cyclical company, intense industry competition, and execution risks across 155 global markets. Financial risks are moderate but include its premium valuation (P/E 28), which could compress. A high short ratio of 3.71 also indicates notable investor skepticism about near-term performance.
The 12-month forecast is for moderate upside with balanced probabilities. The base case (50% probability) sees the stock trading between $155 and $171, aligning with the analyst average target. The bull case (30%) targets $171-$200, while the bear case (20%) could see a pullback to the $137-$147 range, near its 52-week low.
YUM appears fairly valued to slightly overvalued based on traditional metrics. It trades at a trailing P/E of 28.0, which is high, and a forward P/E of 20.8, which is more reasonable but not cheap. The Price-to-Sales ratio of 5.26 also suggests a premium. The valuation reflects its high-quality business model but leaves little room for error.
YUM is a high-quality stock, but its attractiveness at the current price is muted. The business is excellent, with a 19% net margin and $1.64B in annual free cash flow. However, with a forward P/E of 20.8 and only ~10% upside to the average analyst target of $171.75, it is fairly valued. It is more of a 'Hold' than a strong 'Buy' at this level.
YUM is more suitable for long-term investors seeking stable, dividend-growing companies. Its franchise model provides durable cash flows ideal for compounding over time. For short-term traders, the limited upside to analyst targets and recent volatility make it less appealing. The 1.93% dividend yield and 51% payout ratio support a long-term income orientation.