Yum Brands (YUM) earnings: is the stock ready for a come-back?

7:15 pm ET, 30 Oct 2018

Yum! Brands, Inc. (YUM) shares are trading at $86.43, up 1%. The company is announcing its quarterly earnings results on Wednesday before the market opens. What's driving YUM stock price? What's YUM stock price forecast?

Yum Brands operates and franchises quick-service restaurants globally under the KFC, Pizza Hut, and Taco Bell brands. The company is in the process of re-franchising its restaurants. At the end of the last quarter, the global franchise ownership share was 97%.

Investors love the stock because of the management’s commitment to increasing sales and improving the return on capital. On the other hand, some bearish investors worry about rising competition in the quick service restaurants business. Last quarter’s revenue fell 3.5% to $1.37 billion and earnings per share came at 90 cents compared to 65 cents for the same period last year.

Second-quarter results for the fiscal year 2019 will be released before market open on October 31, 2018. Analysts expect the company to earn 83 cents on revenue of $1.38 billion. The company beat analysts’ estimates in the previous four quarters.

What is the sentiment towards the YUM stock? Our technical analysis shows that: 

  • The stock short-term sentiment (next 30 days) is trending positive;
  • The mid-term sentiment (3-6 months) is trending positive;
  • The long-term sentiment (9-12 months) is trending positive. 

Over the last month, Yum! Brands, Inc. (YUM) returned -0.79%.

Yum! Brands, Inc. (YUM) average analyst price target ($88.65) is -0.19% below its current price ($88.82).

For the latest price and information on Yum! Brands, Inc., please visit Finstead and search for "YUM price" or "YUM news".

Yum! Brands, Inc. (YUM) Stock Guide

Updated at: 9:11 pm ET, 18 Sep 2020

Before we start: if you're looking for YUM stock price, you can quickly find it out by visiting Finny and typing "YUM quote". If you're looking for a quick scoop on YUM stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "YUM". You'll get all this info in one place. Or you can just type "YUM news" to get the latest stock news.

Looking to buy or sell Yum! Brands, Inc. (YUM)? Interested in getting the full scoop on YUM, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this YUM stock guide, we'll address key questions about YUM, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are YUM earnings?
2. What is YUM dividend?
3. What is YUM dividend yield?
4. What is YUM stock forecast (i.e., prediction)?
5. YUM buy or sell? What is YUM Finny Score?
6. What are the reasons to buy YUM? Why should I buy YUM stock?
7. What are the reasons to sell YUM? Why should I sell YUM stock?
8. What are YUM key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are YUM earnings?

YUM trailing 12-month earnings per share (EPS) is $3.34.

2. What is YUM dividend?

YUM forward dividend is $1.88.

3. What is YUM dividend yield?

YUM forward dividend yield is 1.96%.

Analyst Predictions

4. What is YUM stock forecast (i.e., prediction)?

Based on YUM analyst price targets, YUM stock forecast is $99.38 (for a year from now). That means the average analyst price target for YUM stock is $99.38. The prediction is based on 25 analyst estimates.

The low price target for YUM is $80.00, while the high price target is $110.00.

YUM analyst rating is Buy.

Analysis

5. YUM buy or sell? What is YUM Finny Score?

#{finnyScore:50}Our quantitative analysis shows 3 reasons to buy and 3 reasons to sell YUM, resulting in Finny Score of 50.

6. What are the reasons to buy YUM? Why should I buy YUM stock?

Here are the reasons to buy YUM stock:

  • We're encouraged by Yum Brands' move to a 93% franchisee ownership structure after the separation of Yum China, which creates a more diversified and stable cash flow profile.
  • Wage rate hikes, increased urbanization, and young populations should translate into increased emerging-market restaurant spending.
  • Despite uneven macro trends, average unit volume ($1.2 million) and cash-on-cash returns (around 20%) for new China restaurants still exceed most chains in the region. We see an operating leverage opportunity as productivity metrics at these locations improve.
  • YUM profitability is improving. The YoY profit margin change was 5.35 percentage points. See YUM profitability chart.
  • YUM forward dividend yield is 1.96%, higher than the industry (0.54%) and sector (0.55%) forward dividend yields. See YUM forward dividend chart.
  • YUM average analyst rating is Buy. See YUM analyst rating chart.

7. What are the reasons to sell YUM? Why should I sell YUM stock?

Let's look at the reasons to sell YUM stock (i.e., the bear case):

  • The global quick-service restaurant category is intensively competitive, marked by nonexistent switching costs, frequent price wars, and evolving consumer tastes and preferences.
  • Bankruptcies among quick-service restaurant franchisees escalate during cyclical downturns. The possibility of rising interest rates could constrain growth or maintenance efforts by franchisees.
  • We consider Yum to be in the early stages of a compelling consumption story in China, but also have concerns that a slowing economy or publicity over food quality scares can have a negative impact on Yum's stock.
  • YUM quarterly revenue growth was -8.50%, lower than the industry and sector average revenue growth (1.25% and 0.78%, respectively). See YUM revenue growth chart.
  • YUM Price/Sales ratio is 5.27, which is high compared to its industry peers’ P/S ratios. See YUM forward Price/Sales ratio chart.
  • YUM Enterprise Value/Revenue multiple is 7.17, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See YUM Enterprise Value/Revenue chart.

Key Stats

8. What are YUM key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for YUM:

Metrics YUM
Price $91.40
Average Price Target / Upside $99.38 / 8.73%
Average Analyst Rating Buy
Forward Dividend Yield 1.96%
Industry Restaurants
Sector Consumer Cyclical
Number of Employees 34,000
Market Cap $28.98B
Forward P/E Ratio 24.72
Price/Book Ratio 5.27
Revenue (TTM) $5.49B
YoY Quarterly Revenue Growth -8.50%
Profit Margin 18.78%

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