Guggenheim Has Lowered Expectations for Yum! Brands (NYSE:YUM) Stock Price

Key Points

• Guggenheim lowered Yum! Brands’ price target from $180 to $155 while maintaining a “Buy” rating, implying roughly 11% upside from the prior close.
• Analyst sentiment remains positive overall, with a consensus “Moderate Buy” rating and average price target of $172.72, despite several firms recently reducing their targets.
• Yum! Brands reported quarterly earnings of $1.62 per share, ahead of estimates, while revenue rose 12.2% year over year. The company also authorized a $4 billion share-repurchase program, covering up to 9.4% of outstanding shares.

Yum! Brands (NYSE:YUM - Get Free Report) had its price objective dropped by Guggenheim from $180.00 to $155.00 in a report released on Tuesday, Benzinga reports. The firm currently has a "buy" rating on the restaurant operator's stock. Guggenheim's price target points to a potential upside of 11.34% from the company's previous close.

Several other research firms also recently weighed in on YUM. Wells Fargo & Company raised shares of Yum! Brands from an "equal weight" rating to an "overweight" rating and boosted their target price for the stock from $165.00 to $175.00 in a research report on Thursday, September 10th. Robert W. Baird lowered their price objective on shares of Yum! Brands from $174.00 to $165.00 and set an "outperform" rating for the company in a research note on Wednesday, September 16th. JPMorgan Chase & Co. reduced their target price on Yum! Brands from $160.00 to $150.00 and set an "overweight" rating for the company in a research note on Tuesday, September 29th. Weiss Ratings downgraded Yum! Brands from a "buy (b)" rating to a "buy (b-)" rating in a research note on Tuesday, July 28th. Finally, TD Cowen reissued a "buy" rating and issued a $180.00 price objective on shares of Yum! Brands in a report on Tuesday, June 16th. Thirteen investment analysts have rated the stock with a Buy rating and eight have given a Hold rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of $172.72.

Yum! Brands Price Performance

Yum! Brands stock traded up $2.25 during midday trading on Tuesday, reaching $139.22. The company's stock had a trading volume of 377,275 shares, compared to its average volume of 2,144,266. The stock has a market capitalization of $37.99 billion, a P/E ratio of 17.51, a PEG ratio of 2.17 and a beta of 0.55. The stock's 50-day simple moving average is $146.58 and its 200-day simple moving average is $152.30. Yum! Brands has a 52-week low of $134.26 and a 52-week high of $170.14.

Yum! Brands (NYSE:YUM - Get Free Report) last issued its quarterly earnings results on Thursday, July 30th. The restaurant operator reported $1.62 earnings per share for the quarter, topping analysts' consensus estimates of $1.58 by $0.04. The business had revenue of $2.17 billion for the quarter, compared to analyst estimates of $2.18 billion. Yum! Brands had a negative return on equity of 24.57% and a net margin of 25.42%.The company's revenue was up 12.2% on a year-over-year basis. During the same quarter in the previous year, the firm earned $1.44 earnings per share. As a group, equities research analysts expect that Yum! Brands will post 6.46 earnings per share for the current fiscal year.

Yum! Brands announced that its Board of Directors has approved a share repurchase program on Tuesday, June 16th that authorizes the company to repurchase $4.00 billion in outstanding shares. This repurchase authorization authorizes the restaurant operator to buy up to 9.4% of its stock through open market purchases. Stock repurchase programs are typically a sign that the company's leadership believes its shares are undervalued.

Insider Buying and Selling

In related news, COO Tracy Skeans sold 3,494 shares of the stock in a transaction on Monday, August 24th. The shares were sold at an average price of $158.00, for a total transaction of $552,052.00. Following the sale, the chief operating officer directly owned 3 shares of the company's stock, valued at approximately $474. This represents a 99.91% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Scott Mezvinsky sold 268 shares of the stock in a transaction dated Tuesday, September 1st. The stock was sold at an average price of $153.64, for a total transaction of $41,175.52. Following the sale, the chief executive officer directly owned 482 shares in the company, valued at approximately $74,054.48. The trade was a 35.73% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 12,493 shares of company stock valued at $1,926,462 in the last ninety days. Insiders own 0.14% of the company's stock.

Hedge Funds Weigh In On Yum! Brands

A number of large investors have recently bought and sold shares of the business. Boltwood Capital Management lifted its position in shares of Yum! Brands by 10.2% during the 3rd quarter. Boltwood Capital Management now owns 1,619 shares of the restaurant operator's stock valued at $221,000 after buying an additional 150 shares in the last quarter. Envestnet Portfolio Solutions Inc. lifted its holdings in Yum! Brands by 25.3% during the second quarter. Envestnet Portfolio Solutions Inc. now owns 23,572 shares of the restaurant operator's stock valued at $3,768,000 after purchasing an additional 4,760 shares in the last quarter. Bullseye Investment Management LLC acquired a new stake in shares of Yum! Brands in the second quarter valued at about $248,000. Tidal Investments LLC grew its position in shares of Yum! Brands by 114.4% in the second quarter. Tidal Investments LLC now owns 53,189 shares of the restaurant operator's stock valued at $8,503,000 after purchasing an additional 28,380 shares during the period. Finally, Van Hulzen Asset Management LLC increased its stake in shares of Yum! Brands by 2.2% during the second quarter. Van Hulzen Asset Management LLC now owns 8,008 shares of the restaurant operator's stock worth $1,280,000 after purchasing an additional 171 shares in the last quarter. Institutional investors and hedge funds own 82.37% of the company's stock.

Yum! Brands Company Profile

Yum! Brands, Inc is a global restaurant company that develops, operates, and franchises quick-service restaurants. Its portfolio includes KFC, which specializes in fried and cooked chicken; Taco Bell, known for Mexican-inspired food; Pizza Hut, which offers pizza and related products; and The Habit Burger Grill, a fast-casual chain focused on chargrilled burgers, sandwiches, salads, and shakes.

The company primarily uses a franchised business model, working with franchisees and licensees to operate restaurants in more than 150 countries and territories.

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