On June 27, Peter Salah of BTIG upgraded Yum! Brands (YUM) from “neutral” to “buy” with a target price of $92.0, which represents a return potential of 16.6%. Salah stated that the recent fall in Yum! Brands’ stock price made the stock more attractive. He expects the company’s $200 million investment in GrubHub to provide Yum! Brands with customer level data. The data aren’t available for other companies. The data could help Yum! Brands make better decisions for all three of its brands. Salah raised his 2019 EPS expectations for the company from $3.77 to $3.85.
Other analysts’ estimates
Of the 23 analysts that follow Yum! Brands, 52.2% recommend a “buy,” while 47.8% recommend a “hold.” None of the analysts recommend a “sell.” On average, analysts expect the company’s stock price to reach $88.58 in the next 12 months, which represents a return potential of 12.3%. On June 19, Citigroup raised its target price from $80 to $87. On May 30, UBS increased its target price from $89 to $91.
Yum! Brands’ stock price moves in tandem with analysts’ ratings. When analysts’ raise their target price, the company’s stock price tends to increase and vice versa. Currently, Yum! Brands is trading below analysts’ 12-month target price. However, the stock price doesn’t mean an automatic “buy.” Investors are advised to review analysts’ estimates before making any investment decisions.
For the next four quarters, analysts expect Yum! Brands to post revenues of $5.54 billion—a fall of 5.0% from $5.83 billion in the same four quarters the previous year. During the same period, the company’s EPS is expected to rise 4.3% to $3.36.
The stock price and return potential of Yum! Brands’ peers are:
- Papa John’s (PZZA) has a target price of $59.80 with a return potential of 17.1%.
- Domino’s Pizza (DPZ) has a target price of $278.06—a fall of 1.2% from its current stock price.
Next, we’ll discuss Yum! Brands’ stock performance.