BMO Capital analyst Andrew Strelzik reiterated a Hold rating on Yum! Brands (YUM – Research Report) today and set a price target of $139.00.
Andrew Strelzik has given his Hold rating due to a combination of factors influencing Yum! Brands’ performance. While Taco Bell’s growth prospects appear promising, with expectations for significant increases in average unit volumes and international expansion by 2030, challenges remain within the broader Yum! portfolio. The domestic market faces ongoing difficulties, and the competitive landscape presents potential risks that balance the overall risk/reward scenario for investors.
Despite Taco Bell’s ambitious targets, including a substantial rise in U.S. company restaurant margins and a notable contribution to Yum!’s operating profit, the international growth is expected to have a modest impact on the company’s global net unit growth in the near term. These factors suggest that while Yum! Brands is positioned to achieve its long-term growth objectives, the current market conditions justify a Hold rating as the company navigates these challenges.
Strelzik covers the Consumer Cyclical sector, focusing on stocks such as Brinker International, Darden Restaurants, and Papa John’s International. According to TipRanks, Strelzik has an average return of 5.5% and a 56.30% success rate on recommended stocks.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $146.00 price target.