Yum! Brands, Inc. (NYSE:YUM) Given Average Recommendation of "Moderate Buy" by Brokerages

Key Points

• Yum! Brands has a consensus analyst rating of “Moderate Buy”, with 13 buy ratings and 7 hold ratings among 20 analysts covering the stock. The average 1-year price target is about $176.17.
• The company recently beat quarterly earnings expectations, posting $1.50 EPS versus the expected $1.39 and revenue of $2.06 billion, which was up 15.2% year over year. Analysts now expect full-year EPS of 6.78.
• Yum! also declared a quarterly dividend of $0.75 per share, equal to an annualized $3.00 dividend and a 2.0% yield. Meanwhile, market attention is focused on reports that the company may consider an exit from Pizza Hut, which some analysts and commentators see as potentially value-enhancing.

Shares of Yum! Brands, Inc. (NYSE:YUM - Get Free Report) have been given a consensus recommendation of "Moderate Buy" by the twenty analysts that are currently covering the stock, Marketbeat reports. Seven research analysts have rated the stock with a hold rating and thirteen have given a buy rating to the company. The average 1 year price target among brokers that have updated their coverage on the stock in the last year is $176.1667.

A number of equities research analysts recently issued reports on the company. TD Cowen reduced their target price on Yum! Brands from $186.00 to $180.00 and set a "buy" rating on the stock in a research note on Wednesday, May 27th. JPMorgan Chase & Co. upped their target price on Yum! Brands from $160.00 to $170.00 and gave the company an "overweight" rating in a research note on Tuesday, February 24th. Citigroup upped their target price on Yum! Brands from $174.00 to $175.00 and gave the company a "neutral" rating in a research note on Thursday, April 30th. Royal Bank Of Canada reissued a "sector perform" rating and set a $165.00 price target on shares of Yum! Brands in a research note on Monday, April 20th. Finally, Wells Fargo & Company increased their price target on Yum! Brands from $160.00 to $165.00 and gave the stock an "equal weight" rating in a research note on Thursday, April 30th.

Yum! Brands Stock Performance

YUM stock opened at $150.78 on Friday. Yum! Brands has a 1 year low of $137.33 and a 1 year high of $169.39. The stock's 50 day moving average price is $155.32 and its 200 day moving average price is $155.60. The firm has a market cap of $41.56 billion, a P/E ratio of 24.32, a PEG ratio of 1.92 and a beta of 0.57.

Yum! Brands (NYSE:YUM - Get Free Report) last posted its earnings results on Wednesday, April 29th. The restaurant operator reported $1.50 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.39 by $0.11. Yum! Brands had a negative return on equity of 23.51% and a net margin of 20.48%.The firm had revenue of $2.06 billion for the quarter, compared to analyst estimates of $2.04 billion. During the same quarter in the prior year, the company earned $1.30 EPS. Yum! Brands's revenue was up 15.2% on a year-over-year basis. On average, research analysts predict that Yum! Brands will post 6.78 earnings per share for the current year.

Yum! Brands Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, June 12th. Shareholders of record on Wednesday, May 27th will be paid a dividend of $0.75 per share. This represents a $3.00 dividend on an annualized basis and a dividend yield of 2.0%. The ex-dividend date of this dividend is Wednesday, May 27th. Yum! Brands's dividend payout ratio is currently 48.39%.

Key Stories Impacting Yum! Brands

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

• Positive Sentiment: Reports that Yum Brands is weighing an exit from Pizza Hut are boosting the stock on hopes that divesting the weaker pizza chain could sharpen execution and improve margins. Pizza Hut's future in doubt as Yum Brands weighs exit and surprise company eyes takeover
• Positive Sentiment: Jim Cramer also argued that “a Yum free of Pizza Hut” could trade higher, reinforcing the market’s view that a possible sale would be a value-creating move for YUM. Jim Cramer Believes “A Yum Free of Pizza Hut Is a Yum That’s Going to Trade Much Higher”
• Positive Sentiment: Analyst commentary raised Yum’s fair value estimate and cited stronger KFC and Taco Bell fundamentals, suggesting the stock may still have upside if the Pizza Hut situation is resolved favorably. How The Investment Story Is Shifting For Yum Brands (YUM) After New Targets And Pizza Hut Talks
• Neutral Sentiment: Yum announced that COO and Chief People Officer Tracy Skeans will retire after 25 years, a leadership change that adds some succession-planning focus but is not clearly a major business setback. Yum Brands COO Tracy Skeans stepping down after 25 years with the company
• Neutral Sentiment: Separate coverage repeated the retirement news, keeping the focus on management transition rather than a change in near-term operating results. Yum Brands COO and chief people officer to retire after 25 years with the company

Insiders Place Their Bets

In other Yum! Brands news, CEO Scott Mezvinsky sold 277 shares of the stock in a transaction on Friday, May 1st. The stock was sold at an average price of $160.48, for a total transaction of $44,452.96. Following the transaction, the chief executive officer owned 483 shares of the company's stock, valued at $77,511.84. This represents a 36.45% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sean Tresvant sold 3,000 shares of the stock in a transaction on Tuesday, May 26th. The stock was sold at an average price of $154.68, for a total value of $464,040.00. Following the transaction, the chief executive officer directly owned 3,140 shares in the company, valued at approximately $485,695.20. This represents a 48.86% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 5,895 shares of company stock worth $906,499. 0.14% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in YUM. Vanguard Group Inc. increased its holdings in shares of Yum! Brands by 2.0% during the 3rd quarter. Vanguard Group Inc. now owns 35,242,558 shares of the restaurant operator's stock worth $5,356,869,000 after buying an additional 684,946 shares during the last quarter. Capital International Investors increased its holdings in shares of Yum! Brands by 20.0% during the 4th quarter. Capital International Investors now owns 19,419,826 shares of the restaurant operator's stock worth $2,938,139,000 after buying an additional 3,240,190 shares during the last quarter. State Street Corp increased its holdings in shares of Yum! Brands by 1.0% during the 4th quarter. State Street Corp now owns 13,164,814 shares of the restaurant operator's stock worth $1,991,573,000 after buying an additional 124,720 shares during the last quarter. Geode Capital Management LLC increased its holdings in shares of Yum! Brands by 1.4% during the 4th quarter. Geode Capital Management LLC now owns 8,800,382 shares of the restaurant operator's stock worth $1,334,427,000 after buying an additional 121,304 shares during the last quarter. Finally, Norges Bank acquired a new stake in shares of Yum! Brands during the 4th quarter worth $706,799,000. Hedge funds and other institutional investors own 82.37% of the company's stock.

About Yum! Brands

Yum! Brands, Inc NYSE: YUM is a global quick-service restaurant company that develops, operates and franchises a portfolio of well-known restaurant brands. The company's principal brands are KFC, Pizza Hut and Taco Bell, each focused on distinct product categories—KFC on fried chicken and related menu items, Pizza Hut on pizza and complementary offerings, and Taco Bell on Mexican-inspired quick-service food. Yum! is headquartered in Louisville, Kentucky and was formed as Tricon Global Restaurants in 1997 when PepsiCo spun off its restaurant businesses, later adopting the Yum! Brands name.

The company's operating model centers on brand development, system growth and franchising; a large portion of its restaurants are operated by independent franchisees, and Yum! generates revenue through franchise royalties and fees in addition to sales from company-operated locations.

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