Yum! Brands downgraded to Neutral from Buy at Citi

Citi analyst Jon Tower downgraded Yum! Brands (YUM) to Neutral from Buy with a price target of $141, down from $153. The firm expects a difficult international operating environment to persist into 2025, with lingering risks of global unit closures, ongoing macro challenges in China, and slowing U.S. wage growth potentially translating into reduced customer visits and increased discounting “that deflates the royalty stream” back to Yum!. At the same time, Citi is less optimistic regarding how franchisee tech fees ultimately benefit the bottom line, with a shifting narrative of where tech could go and insufficient commentary to understand how to think about the net trajectory.