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Yum! Brands (YUM)
NYSE:YUM
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Yum! Brands
(NYSE:YUM)75Outperform
Positive Factors
Brand Momentum
YUM cited strong brand momentum across the portfolio entering 2025, supported in part by Middle East recovery.
Sales Growth
Yum aims to deliver 5% global unit growth, 7% global system sales growth and core operating profit growth of at least 8% under its long-term growth target.
Negative Factors
Competitive Pressure
Competitive activity is likely to continue pressuring Pizza Hut U.S. performance.
Yum! Brands (YUM) vs. S&P 500 (SPY)
Market Cap
$43.64B
Dividend Yield1.74%
Average Volume (3M)2.27M
Price to Earnings (P/E)30.0
Beta (1Y)0.57
Revenue Growth6.68%
EPS Growth-7.09%
CountryUS
Employees40,000
SectorConsumer Cyclical
Sector Strength53
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)5.22
Shares Outstanding279,101,930
10 Day Avg. Volume2,139,442
30 Day Avg. Volume2,272,653
Financial Highlights & Ratios
PEG Ratio18.14
Price to Book (P/B)N/A
Price to Sales (P/S)5.78
Price to Cash Flow (P/CF)21.30
P/FCF Ratio16.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$155.09Price Target Upside-2.10% Downside
Rating ConsensusHold
Number of Analyst Covering20
Yum! Brands Business Overview & Revenue Model
Company DescriptionHeadquartered in Kentucky, Yum! Brands, Inc. is a service restaurant company, which develops, operates, franchises, and licenses quick service restaurants worldwide. The company operates in three divisions: the KFC Division, the Pizza Hut Division, and the Taco Bell Division.
How the Company Makes MoneyYum! Brands generates revenue primarily through franchise fees, royalties, and sales from company-owned restaurants. The majority of its restaurants are franchised, meaning franchisees pay initial fees and ongoing royalties based on a percentage of their sales to Yum! Brands. These franchise agreements provide a steady income stream with lower operational risk. Additionally, Yum! Brands earns revenue from the supply chain by selling food and paper products to franchisees. The company's strategic partnerships, marketing initiatives, and menu innovations further support its revenue growth. Key factors such as brand strength, global market presence, and scalability contribute significantly to Yum! Brands' earnings.
Yum! Brands Financial Statement Overview
Summary
Yum! Brands shows strong revenue growth and effective cash flow management, but is hindered by high leverage and negative equity, posing financial risks. Monitoring net income trends and leverage levels is crucial.Income Statement
Yum! Brands shows a solid revenue growth trend over the past few years with a notable increase in total revenue from $5.65 billion in 2020 to $7.55 billion in 2024. Gross Profit Margin is consistently high as 100% due to the way cost is reported. EBIT and EBITDA margins are strong, indicating efficient operations. However, Net Profit Margin has seen some fluctuations. Overall, revenue growth and profitability are positive, but the net income dip in 2024 requires attention.75
Positive
Balance Sheet
The company operates with negative stockholder equity, indicating a high leverage situation due to substantial total debt exceeding total assets. Debt-to-equity ratio is not calculable due to negative equity, which poses financial risk. Despite this, the company has managed a stable asset base over the years. The balance sheet reflects potential financial vulnerability and high leverage, which are key risk factors.60
Neutral
Cash Flow
Operating cash flow is robust and growing, with an increase from $1.31 billion in 2019 to $1.69 billion in 2024, supporting strong free cash flow. The Free Cash Flow to Net Income Ratio is favorable, indicating effective cash management. However, fluctuations in net income and capital expenditures could impact long-term cash stability. Overall, cash flow management remains a strong suit.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.55B | 7.08B | 6.84B | 6.58B | 5.65B | Gross Profit |
| 3.58B | 3.50B | 3.31B | 3.17B | 2.69B | EBIT |
| 2.40B | 2.32B | 2.19B | 2.14B | 1.50B | EBITDA |
| 2.56B | 2.48B | 2.40B | 2.41B | 1.76B | Net Income Common Stockholders |
| 1.49B | 1.60B | 1.32B | 1.57B | 904.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 707.00M | 512.00M | 367.00M | 486.00M | 730.00M | Total Assets |
| 6.73B | 6.23B | 5.85B | 5.97B | 5.85B | Total Debt |
| 12.29B | 12.03B | 11.85B | 11.25B | 10.72B | Net Debt |
| 11.67B | 11.52B | 11.48B | 10.76B | 9.99B | Total Liabilities |
| 14.38B | 14.09B | 14.72B | 14.34B | 13.74B | Stockholders Equity |
| -7.65B | -7.86B | -8.88B | -8.37B | -7.89B |
| Cash Flow | Free Cash Flow | |||
| 1.69B | 1.32B | 1.15B | 1.48B | 1.15B | Operating Cash Flow |
| 1.69B | 1.60B | 1.43B | 1.71B | 1.30B | Investing Cash Flow |
| -422.00M | -107.00M | -202.00M | -173.00M | -335.00M | Financing Cash Flow |
| -1.16B | -1.43B | -1.32B | -1.77B | -738.00M |
Yum! Brands Technical Analysis
Positive
158.41
Price Trends
136.64
Positive
135.42
Positive
134.05
Positive
Market Momentum
6.07
Negative
76.84
Negative
88.56
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUM, the sentiment is Positive. The current price of 158.41 is above the 20-day moving average (MA) of 147.83, above the 50-day MA of 136.64, and above the 200-day MA of 134.05, indicating a bullish trend. The MACD of 6.07 indicates Negative momentum. The RSI at 76.84 is Negative, neither overbought nor oversold. The STOCH value of 88.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for YUM.
Yum! Brands Risk Analysis
Yum! Brands disclosed 27 risk factors in its most recent earnings report. Yum! Brands reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Yum! Brands Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $218.46B | 26.84 | -216.57% | 2.23% | 1.67% | -1.61% | |
75 Outperform | $43.64B | 29.99 | -19.43% | 1.74% | 6.68% | -7.09% | |
71 Outperform | $16.59B | 28.98 | -14.74% | 1.25% | 5.07% | 13.74% | |
66 Neutral | $3.11B | 16.40 | 74.94% | 6.70% | 2.98% | -2.58% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
50 Neutral | $724.91M | ― | 4.15% | 4.58% | -6.02% | -136.86% |
* Consumer Cyclical Sector Average
Performance Comparison
YUM
Yum! Brands
158.41
22.38
16.45%
DPZ
Domino's Pizza
481.77
38.07
8.58%
JACK
Jack In The Box
36.14
-36.00
-49.90%
MCD
McDonald's
305.77
20.18
7.07%
WEN
Wendy's
14.92
-2.46
-14.15%
QSR
Restaurant Brands International
65.39
-11.19
-14.61%
Yum! Brands Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 21.27% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
Yum! Brands demonstrated strong growth in digital sales and expansion of units globally, with significant contributions from Taco Bell and KFC. However, Pizza Hut faced sales challenges, and closures in Turkey impacted overall unit growth. The company remains optimistic about future growth and technology integration.Highlights
Digital Sales and Technology Advancements
Digital sales grew approximately 15% in 2024, with over 50% of system sales through digital channels. Introduction of 'Byte by Yum!' technology platform to enhance consumer experience and streamline operations.
Taco Bell and KFC Performance
Taco Bell US delivered a strong year with a 6% increase in system sales, outperforming the industry. KFC International saw a 14% core operating profit growth in Q4.
Record Unit Openings
Opened over 1,800 new units in Q4 and more than 4,500 for the year, with KFC leading with nearly 2,900 new units in 2024.
Core Operating Profit Growth
Full year core operating profit growth of 8%, despite challenging industry conditions.
Habit Burger Operational Improvements
Same-store sales trends improved in Q4 with labor expense reduced by 150 basis points, leading to a restaurant-level margin of 10%.
Lowlights
Pizza Hut Sales Decline
Full year system sales for Pizza Hut declined by 1%. US sales were under pressure due to increased competition.
Same-Store Sales Challenges
Overall same-store sales declined by 1% for the year, impacted by global consumer sentiment and Middle East conflict.
Turkey Franchise Closure
Terminated franchise agreements in Turkey, resulting in the removal of 284 KFC and 254 Pizza Hut stores from the unit count in Q1.
Company Guidance
During the Yum! Brands 2024 Fourth Quarter Earnings Call, the company provided detailed guidance for the future, highlighting several key metrics. The digital sales grew approximately 15% in 2024, contributing to over 50% of system sales, while core operating profit increased by 8%. Taco Bell achieved a 5% rise in same-store sales year-over-year, outpacing the U.S. industry by five percentage points. KFC's international same-store sales improved by 1% in the fourth quarter, and the brand saw a 7% growth in units, driving system sales growth of 3% for the full year. The company also introduced Byte by Yum!, a technology platform aimed at enhancing consumer experiences and streamlining operations. For 2025, Yum! Brands expects to maintain a core operating profit growth of 8% and unit growth of at least 4-5%, excluding one-time closures in Turkey.Yum! Brands Corporate Events
Business Operations and Strategy
Yum! Brands Unveils Strategic Vision for Taco Bell
Positive
Mar 4, 2025
On March 4, 2025, Yum! Brands hosted Taco Bell Consumer Day, unveiling a strategic vision for Taco Bell’s future, including plans for innovation and global brand experience enhancement. Taco Bell aims for significant growth with targets of 8% U.S. same-store sales growth for Q1 2025 and ambitious goals for 2030, such as increasing annual unit volumes and expanding its international presence to 3,000 stores, highlighting its commitment to innovation and expansion.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.