Zacks Research Increases Earnings Estimates for Yum! Brands

Key Points

• Zacks Research raised Yum! Brands’ FY2027 EPS estimate to $6.92 from $6.90 and projects $7.71 EPS for FY2028, while maintaining a “Hold” rating.
• Yum! Brands’ latest quarterly results exceeded expectations, with EPS of $1.62 versus the $1.58 consensus and revenue growth of 12.2% year over year to $2.17 billion.
• Analyst sentiment remains broadly positive, with a “Moderate Buy” consensus and an average price target of $172.72; the company also authorized a $4 billion share repurchase plan and pays a $0.75 quarterly dividend.

Yum! Brands, Inc. (NYSE:YUM - Free Report) - Research analysts at Zacks Research boosted their FY2027 earnings per share (EPS) estimates for Yum! Brands in a report issued on Monday, October 5th. Zacks Research analyst Team now anticipates that the restaurant operator will post earnings per share of $6.92 for the year, up from their previous estimate of $6.90. Zacks Research has a "Hold" rating on the stock. The consensus estimate for Yum! Brands' current full-year earnings is $6.46 per share. Zacks Research also issued estimates for Yum! Brands' Q4 2027 earnings at $2.05 EPS and FY2028 earnings at $7.71 EPS.

Yum! Brands (NYSE:YUM - Get Free Report) last released its 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 firm had revenue of $2.17 billion for the quarter, compared to the consensus estimate of $2.18 billion. Yum! Brands had a net margin of 25.42% and a negative return on equity of 24.57%. The company's revenue was up 12.2% compared to the same quarter last year. During the same period in the prior year, the firm earned $1.44 EPS.

Other equities research analysts have also recently issued research reports about the stock. Weiss Ratings cut shares of Yum! Brands from a "buy (b)" rating to a "buy (b-)" rating in a report on Tuesday, July 28th. Deutsche Bank Aktiengesellschaft reissued a "hold" rating and issued a $174.00 price target on shares of Yum! Brands in a research report on Friday, July 31st. Royal Bank Of Canada upped their price target on Yum! Brands from $165.00 to $170.00 and gave the stock a "sector perform" rating in a research note on Friday, July 31st. JPMorgan Chase & Co. reduced their price objective on Yum! Brands from $160.00 to $150.00 and set an "overweight" rating for the company in a research report on Tuesday, September 29th. Finally, Citigroup lifted their price objective on Yum! Brands from $175.00 to $178.00 and gave the company a "neutral" rating in a research note on Sunday, July 12th. Thirteen research analysts have rated the stock with a Buy rating and eight have given a Hold rating to the company. According to data from MarketBeat, Yum! Brands presently has a consensus rating of "Moderate Buy" and an average price target of $172.72.

Yum! Brands Price Performance

Shares of NYSE YUM opened at $139.89 on Wednesday. Yum! Brands has a 1 year low of $134.26 and a 1 year high of $170.14. The firm has a 50-day moving average of $146.37 and a 200 day moving average of $152.17. The stock has a market cap of $38.18 billion, a P/E ratio of 17.60, a price-to-earnings-growth ratio of 2.19 and a beta of 0.55.

Institutional Trading of Yum! Brands

Hedge funds have recently bought and sold shares of the company. Boltwood Capital Management grew its stake 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 purchasing an additional 150 shares during the period. Envestnet Portfolio Solutions Inc. lifted its stake in shares of Yum! Brands by 25.3% in the 2nd quarter. Envestnet Portfolio Solutions Inc. now owns 23,572 shares of the restaurant operator's stock worth $3,768,000 after purchasing an additional 4,760 shares during the period. Bullseye Investment Management LLC purchased a new position in shares of Yum! Brands in the second quarter worth approximately $248,000. Tidal Investments LLC boosted its holdings 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 worth $8,503,000 after buying an additional 28,380 shares during the last quarter. Finally, Van Hulzen Asset Management LLC grew its position in 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 valued at $1,280,000 after buying an additional 171 shares during the period. Hedge funds and other institutional investors own 82.37% of the company's stock.

Insider Activity

In other Yum! Brands news, CEO Scott Mezvinsky sold 241 shares of the company's stock in a transaction dated Thursday, October 1st. The shares were sold at an average price of $136.89, for a total transaction of $32,990.49. Following the transaction, the chief executive officer owned 482 shares in the company, valued at approximately $65,980.98. This represents a 33.33% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP David Russell sold 7,961 shares of the stock in a transaction on Monday, August 3rd. The shares were 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 $1,831,674. The trade was a 39.96% 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. In the last ninety days, insiders have sold 12,493 shares of company stock worth $1,926,462. Corporate insiders own 0.14% of the company's stock.

Yum! Brands announced that its Board of Directors has approved a share buyback plan on Tuesday, June 16th that allows the company to buyback $4.00 billion in shares. This buyback authorization allows the restaurant operator to purchase up to 9.4% of its shares through open market purchases. Shares buyback plans are typically an indication that the company's management believes its shares are undervalued.

Yum! Brands Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Friday, September 18th. Stockholders of record on Wednesday, September 9th were issued a dividend of $0.75 per share. The ex-dividend date was Wednesday, September 9th. This represents a $3.00 dividend on an annualized basis and a dividend yield of 2.1%. Yum! Brands's dividend payout ratio is presently 37.74%.

About Yum! Brands

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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