Yum! Brands (NYSE:YUM) Rating Increased to Strong-Buy at Seaport Research Partners

Key Points

• Seaport Research Partners upgraded Yum! Brands to “strong-buy,” adding to a generally positive analyst outlook. Fourteen analysts rate the stock Buy, six Hold and one Sell, producing a consensus “Moderate Buy” rating with a $174.67 target price.
• Yum! Brands reported quarterly EPS of $1.62, above estimates of $1.58, while revenue rose 12.2% year over year to $2.17 billion, slightly below expectations. The company also authorized a $4 billion share-repurchase program, covering up to 9.4% of outstanding shares.
• Despite the bullish analyst coverage and earnings beat, shares opened at $138.12 and were down 1.9%, near their 52-week low and below both their 50-day and 200-day moving averages. Recent insider selling and mixed commentary about Yum!’s earnings outlook add caution to the investment case.

Yum! Brands (NYSE:YUM - Get Free Report) was upgraded by research analysts at Seaport Research Partners to a "strong-buy" rating in a research report issued on Tuesday, Zacks reports.

Several other brokerages have also recently weighed in on YUM. Argus decreased their price objective on shares of Yum! Brands from $185.00 to $180.00 and set a "buy" rating on the stock in a research note on Monday, August 17th. TD Cowen reissued a "buy" rating and issued a $180.00 target price on shares of Yum! Brands in a report on Tuesday, June 16th. UBS Group restated a "buy" rating on shares of Yum! Brands in a research report on Thursday, June 18th. JPMorgan Chase & Co. dropped their price target on Yum! Brands from $170.00 to $160.00 and set an "overweight" rating for the company in a report on Tuesday, August 4th. Finally, Robert W. Baird cut their price objective on Yum! Brands from $174.00 to $165.00 and set an "outperform" rating for the company in a research report on Wednesday. Fourteen research analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $174.67.

Yum! Brands Trading Down 1.9%

NYSE YUM opened at $138.12 on Tuesday. The stock's 50 day moving average is $150.42 and its two-hundred day moving average is $154.38. The company has a market capitalization of $37.69 billion, a price-to-earnings ratio of 17.37, a PEG ratio of 2.23 and a beta of 0.55. Yum! Brands has a 1-year low of $137.33 and a 1-year high of $170.14.

Yum! Brands (NYSE:YUM - Get Free Report) last posted its earnings results on Thursday, July 30th. The restaurant operator reported $1.62 EPS for the quarter, topping the consensus estimate of $1.58 by $0.04. The business had revenue of $2.17 billion during the quarter, compared to the consensus estimate of $2.18 billion. Yum! Brands had a negative return on equity of 24.57% and a net margin of 25.42%.Yum! Brands's revenue was up 12.2% on a year-over-year basis. During the same quarter last year, the company earned $1.44 EPS. On average, analysts predict that Yum! Brands will post 6.51 earnings per share for the current year.

Yum! Brands declared that its Board of Directors has authorized a share buyback program on Tuesday, June 16th that authorizes the company to repurchase $4.00 billion in shares. This repurchase authorization authorizes the restaurant operator to repurchase up to 9.4% of its shares through open market purchases. Shares repurchase programs are usually an indication that the company's management believes its stock is undervalued.

Insider Activity at Yum! Brands

In related news, COO Tracy Skeans sold 3,494 shares of the business's stock in a transaction that occurred on Monday, August 24th. The shares were sold at an average price of $158.00, for a total value of $552,052.00. Following the completion of the transaction, the chief operating officer owned 3 shares in the company, valued at $474. The trade was a 99.91% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP David Russell sold 7,961 shares of the company's stock in a transaction on Monday, August 3rd. The stock was sold at an average price of $153.15, for a total value of $1,219,227.15. Following the transaction, the vice president directly owned 11,960 shares in the company, valued at approximately $1,831,674. This represents a 39.96% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 18,780 shares of company stock valued at $2,940,693 in the last three months. 0.14% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Yum! Brands

A number of institutional investors and hedge funds have recently made changes to their positions in the company. Bullseye Investment Management LLC bought a new position in Yum! Brands in the second quarter valued at approximately $248,000. Tidal Investments LLC raised its position in shares of Yum! Brands by 114.4% during the 2nd quarter. Tidal Investments LLC now owns 53,189 shares of the restaurant operator's stock valued at $8,503,000 after acquiring an additional 28,380 shares during the last quarter. Van Hulzen Asset Management LLC raised its position in shares of Yum! Brands by 2.2% during the 2nd quarter. Van Hulzen Asset Management LLC now owns 8,008 shares of the restaurant operator's stock valued at $1,280,000 after acquiring an additional 171 shares during the last quarter. National Pension Service lifted its stake in shares of Yum! Brands by 4.0% in the 2nd quarter. National Pension Service now owns 470,206 shares of the restaurant operator's stock valued at $75,167,000 after purchasing an additional 18,060 shares during the period. Finally, Cidel Asset Management Inc. boosted its position in shares of Yum! Brands by 5.5% in the 2nd quarter. Cidel Asset Management Inc. now owns 1,484 shares of the restaurant operator's stock worth $237,000 after purchasing an additional 77 shares during the last quarter. Institutional investors own 82.37% of the company's stock.

Trending Headlines about Yum! Brands

Here are the key news stories impacting Yum! Brands this week:

• Positive Sentiment: Seaport Global initiated coverage with a Buy rating, adding a new bullish view that could support investor confidence in Yum!’s long-term growth prospects. Seaport Global initiates coverage of Yum! Brands at Buy
• Positive Sentiment: Yum!’s post–Pizza Hut strategy could create new growth opportunities. The company is concentrating on Taco Bell, KFC and Habit Burger & Grill, while management has indicated it may pursue another acquisition or add a new brand. That could broaden the portfolio, although execution and deal costs remain important considerations. Yum! Brands may pursue a new brand after selling Pizza Hut
• Neutral Sentiment: Analyst opinion remains generally constructive. Robert W. Baird maintained an “outperform” rating and its revised $165 price target implies substantial upside from the recent share price, while the broader analyst consensus is “Moderate Buy.” However, Baird’s target reduction from $174 signals more cautious expectations. Analyst coverage and Yum! Brands outlook
• Negative Sentiment: Zacks named Yum! Brands its Bear of the Day, citing a multiyear deterioration in the company’s earnings outlook and continuing challenges across the fast-food industry. Zacks Bear of the Day: Yum! Brands
• Negative Sentiment: Recent trading performance has lagged peers. Yum! Brands underperformed competitors and recorded another decline heading into the latest session, reinforcing concerns about weak momentum and investor skepticism. Yum! Brands stock underperforms competitors

About Yum! Brands

Yum! Brands, Inc is a global restaurant company that develops, operates and franchises quick-service restaurants. Its portfolio includes KFC, Taco Bell, Pizza Hut and The Habit Burger Grill, which offer products such as fried and grilled chicken, tacos and other Mexican-inspired foods, pizza, burgers and related menu items.

The company's restaurants serve customers through a combination of company-operated locations and franchised and licensed outlets. Yum! Brands supports its restaurant concepts with brand management, franchise services, technology and digital ordering capabilities, while franchisees generally manage day-to-day restaurant operations.

Yum! Brands serves customers in numerous markets worldwide, with a significant presence in the United States and international markets across regions including Asia, Europe, Latin America, the Middle East and Africa.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.