Yum Brands’ (YUM) Taco Bell is testing its ability to compete with McDonald’s (MCD) in the hearts of younger consumers with a new chicken nuggets offering. The new menu item combines all-white meat with a jalapeno buttermilk flavor and an outside layer of tortilla chips and breadcrumbs. This grants it a signature flavor that better aligns with Taco Bell’s Mexican food theme.
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Customers who want to spice up their meals more can get new sauces with these Taco Bell chicken nuggets. That includes the new Bell Sauce, a jalapeno honey mustard sauce dip, and a spicy ranch sauce. Taco Bell’s suggested prices range from $3.99 for five nuggets and one sauce to $6.99 for 10 nuggets and two sauces.
Customers will note that Taco Bell isn’t permanently dedicating itself to the battle with McDonald’s over the chicken nugget market. Instead, this offering will only be available for a limited time. This reflects the company’s ongoing attempts to attract younger customers, who prefer chicken over beef, with limited-time offerings.
What This Means for YUM Stock
Yum Brands could doubly benefit from its new chicken nugget endeavor. Not only do limited-time offers help boost sales as customers flock to try out new menu items, but the low price for the chicken nuggets will likely attract budget-oriented customers.
That’s a big deal considering the state of the economy. While inflation has started to come down, increased prices continue to weigh on consumer’s wallets. That’s especially true for fast-food prices as November’s Consumer Price Index (CPI) showed a 3.6% increase year-over-year in food away from home prices.
This has pressured fast-food stocks in 2024, YUM included. The company’s shares are up 0.78% as of this writing with a 5.09% increase year-to-date. While that performance isn’t great, it’s better than MCD’s 2.83% increase since the start of the year.
Is YUM Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Yum Brands is Moderate Buy based on eight Buy and nine Hold ratings over the last three months. With that comes an average price target of $146.13, a high of $162, and a low of $135. This represents a potential 7.46% upside for YUM shares.
