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Valued at a market cap of $34.5 billion, Yum! Brands, Inc. (YUM) is a global leader in quick service restaurants, renowned for its diverse portfolio of iconic brands including KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill. With a strong presence in over 150 countries, it continues to expand its reach through franchise operations and a commitment to providing consumers with convenient and quality dining experiences. The Louisville, Kentucky-based company is expected to announce its fiscal Q4 earnings results before the market opens on Thursday, Feb. 6.
Ahead of this event, analysts expect the KFC, Taco Bell, and Pizza Hut owner to report a profit of $1.59 per share, up 26.2% from $1.26 per share in the year-ago quarter. However, the company has surpassed Wall Street's bottom-line estimates in one of the past four quarters while missing on three other occasions. YUM missed the consensus EPS estimate by 2.8% in the most recent quarter.
For fiscal 2024, analysts expect YUM to report an EPS of $5.46, an increase of 5.6% from $5.17 in fiscal 2023. In addition, EPS is forecasted to grow 9.9% year-over-year to $6 in fiscal 2025.
Over the past 52 weeks, YUM has declined 3.5%, underperforming the S&P 500 Index's ($SPX) 22.6% gain and the Consumer Discretionary Select Sector SPDR Fund's (XLY) 29.3% increase on a YTD basis.
Despite YUM reporting weaker-than-expected Q3 adjusted EPS of $1.37 and revenue of $1.8 billion, its shares rose 1.5% on Nov. 5 due to key growth drivers. Positive contributions from Taco Bell and KFC, along with the opening of 685 new KFC locations and 49 Taco Bell units, underscored strong unit expansion globally. The adoption of innovative technologies, like drive-thru Voice AI at Taco Bell, demonstrated the company’s focus on operational improvements and customer experience enhancements.
Analysts' consensus view on YUM stock is cautiously optimistic, with a "Moderate Buy" rating. Out of 27 analysts covering the stock, seven give a "Strong Buy," one has a "Moderate Buy," and 19 give a "Hold" rating. This configuration is less bullish than three months ago, with nine analysts suggesting a "Strong Buy."
As of writing, YUM is trading below the average analyst price target of $144.79.
