In a report released yesterday, Zachary Fadem from Wells Fargo maintained a Hold rating on Yum! Brands (YUM – Research Report), with a price target of $145.00.
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Zachary Fadem has given his Hold rating due to a combination of factors influencing Yum! Brands’ current financial outlook. While the company showed positive signs with international headwinds easing and a re-acceleration in Taco Bell’s performance, several challenges remain that temper the optimism. Although Q4 showed better results than expected, especially with the recovery in the Middle East and improvements in China, the closure of over 700 units still poses a significant challenge.
Despite the shares appearing cheap relative to historical standards and Taco Bell’s strong performance, Fadem is cautious due to existing risks. These include the difficulty in achieving over 8% EBIT growth in 2025, ongoing unit risks, and general and administrative expenses not presenting significant upside potential for that year. Moreover, while initiatives like G&A savings and new concepts like Saucy by KFC have shown promise, the overall international restaurant market remains volatile, leading to a conservative approach with a Hold recommendation.
In another report released yesterday, TD Cowen also maintained a Hold rating on the stock with a $151.00 price target.
YUM’s price has also changed slightly for the past six months – from $136.850 to $144.010, which is a 5.23% increase.