Yum! Brands (YUM) Lifted to “Buy” at Zacks Investment Research

Yum! Brands (NYSE:YUM) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research note issued to investors on Sunday. The brokerage presently has a $94.00 price target on the restaurant operator’s stock. Zacks Investment Research‘s price objective indicates a potential upside of 12.16% from the stock’s current price.

According to Zacks, “Yum! Brands’ strategic transformation plan to drive growth, efforts to boost the domestic business coupled with various digital initiatives undertaken, bode well. In fact, the company has performed quite well in the domestic and many key international markets. Following China business spin-off, Yum! Brands’ endeavors to drive growth by employing greater focus on the development of its three iconic global brands, increasing its franchise ownership, and creating a leaner and more efficient cost structure. Shares of Yum! Brands outpaced the industry over the last year. The company also saw positive revisions in 2018 earnings over the last 60 days. Increased focus on bold restaurant development is likely to drive growth going forward. Yet, macroeconomic concerns and negative currency translation raise concern.”

Several other research firms also recently weighed in on YUM. BMO Capital Markets increased their price target on shares of Yum! Brands from $77.00 to $80.00 and gave the stock a “market perform” rating in a research report on Friday, November 3rd. Jefferies Group increased their price target on shares of Yum! Brands from $66.00 to $75.00 and gave the stock a “hold” rating in a research report on Friday, November 3rd. Oppenheimer reiterated a “buy” rating and issued a $85.00 price target on shares of Yum! Brands in a research report on Monday, October 30th. Barclays reiterated an “equal weight” rating and issued a $84.00 price target (up from $79.00) on shares of Yum! Brands in a research report on Tuesday, January 16th. Finally, Cowen reiterated a “buy” rating and issued a $91.00 price target on shares of Yum! Brands in a research report on Friday, November 3rd. Eleven research analysts have rated the stock with a hold rating, thirteen have assigned a buy rating and one has assigned a strong buy rating to the company. Yum! Brands presently has an average rating of “Buy” and an average price target of $81.68.

Yum! Brands (NYSE YUM) opened at $83.81 on Friday. The company has a debt-to-equity ratio of -1.55, a current ratio of 1.42 and a quick ratio of 1.41. Yum! Brands has a 52-week low of $62.36 and a 52-week high of $84.34. The firm has a market cap of $28,240.00, a P/E ratio of 49.01, a price-to-earnings-growth ratio of 2.01 and a beta of 0.91.

Yum! Brands (NYSE:YUM) last released its quarterly earnings results on Thursday, November 2nd. The restaurant operator reported $0.68 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $0.67 by $0.01. Yum! Brands had a net margin of 18.51% and a negative return on equity of 17.19%. The business had revenue of $1.44 billion for the quarter, compared to the consensus estimate of $1.39 billion. During the same period last year, the firm earned $1.09 earnings per share. The company’s quarterly revenue was down 5.4% on a year-over-year basis. sell-side analysts predict that Yum! Brands will post 2.81 EPS for the current fiscal year.

Yum! Brands announced that its Board of Directors has initiated a share repurchase plan on Friday, November 17th that authorizes the company to repurchase $1.50 billion in outstanding shares. This repurchase authorization authorizes the restaurant operator to purchase shares of its stock through open market purchases. Stock repurchase plans are generally an indication that the company’s board believes its stock is undervalued.

In other Yum! Brands news, CEO Brian R. Niccol sold 3,588 shares of Yum! Brands stock in a transaction on Friday, November 3rd. The shares were sold at an average price of $79.90, for a total value of $286,681.20. Following the sale, the chief executive officer now directly owns 15,075 shares in the company, valued at approximately $1,204,492.50. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, CEO Brian R. Niccol sold 1,104 shares of Yum! Brands stock in a transaction on Tuesday, January 2nd. The shares were sold at an average price of $82.37, for a total transaction of $90,936.48. Following the completion of the sale, the chief executive officer now owns 5,509 shares in the company, valued at $453,776.33. The disclosure for this sale can be found here. Over the last quarter, insiders sold 9,937 shares of company stock worth $802,843. 7.38% of the stock is currently owned by insiders.

A number of hedge funds and other institutional investors have recently made changes to their positions in YUM. Profund Advisors LLC increased its holdings in Yum! Brands by 25.6% in the 2nd quarter. Profund Advisors LLC now owns 12,117 shares of the restaurant operator’s stock valued at $894,000 after acquiring an additional 2,472 shares during the last quarter. Menta Capital LLC bought a new stake in Yum! Brands in the 2nd quarter valued at $1,129,000. FMR LLC increased its holdings in Yum! Brands by 9.2% in the 2nd quarter. FMR LLC now owns 3,011,009 shares of the restaurant operator’s stock valued at $222,092,000 after acquiring an additional 254,573 shares during the last quarter. TIAA FSB bought a new stake in Yum! Brands in the 2nd quarter valued at $1,182,000. Finally, Advisor Group Inc. increased its holdings in Yum! Brands by 8.7% in the 2nd quarter. Advisor Group Inc. now owns 19,982 shares of the restaurant operator’s stock valued at $1,476,000 after acquiring an additional 1,600 shares during the last quarter. Institutional investors own 73.68% of the company’s stock.

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About Yum! Brands

YUM! Brands, Inc is engaged in restaurant business. As of December 31, 2016, the Company operated or franchised over 43,500 restaurants in more than 135 countries and territories operating under the KFC, Pizza Hut or Taco Bell (collectively the Concepts) brands. The Company operates through three segments: The KFC Division, which includes the operations of the KFC concept around the world; The Pizza Hut Division, which includes the operations of the Pizza Hut concept around the world, and The Taco Bell Division, which includes the operations of the Taco Bell concept around the world.

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