YUM
Yum! Brands, Inc.$158.62
Unclear
Target $156.35
Report: Mar 07, 2026Consumer Cyclical • Restaurants • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$158.62-1.4%
Rec: UnclearConviction: High
Entry Target
$120.27
(24% below current)
Fair Value
$156.35
(1% below current)
Stop Loss
$115.53
(27% below current)
Position Size
Half
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$169.39
52 Week Low$137.33
Avg. 3 Month Volume1.95M
Efficiency
LTM Gross Margin46.2%
LTM EBITDA Margin33.9%
LTM EBIT Margin31.4%
LTM Operating Margin31.4%
LTM ROA21.5%
LTM ROE-20.6%
LTM ROIC17.1%
LTM ROCE45.8%
Capital Structure
Market Cap (MM)$43.0B
Enterprise Value (MM)$54.2B
Shares Outstanding276.43M
Total Debt (MM)$11.91B
Cash & Equivalents (MM)$709.00M
LTM Net Debt (MM)$11.20B
LTM Net Debt/EBITDA4.0x
Growth
TTM Rev. Growth8.8%
Last 3-Yr Rev. CAGR6.3%
Last 3-Yr EBITDA CAGR6.0%
Last 3-Yr EPS CAGR6.6%
Valuation
Street Target Price$173.15
LTM EV/Revenue6.6x
LTM EV/Gross Profit14.3x
LTM EV/EBIT21.0x
LTM EV/EBITDA19.5x
LTM P/E27.6x
LTM EV/FCF33.1x
LTM P/FCF26.2x
LTM P/TB6.8x
LTM P/B-5.9x
Dividend Yield1.8%
Payout Ratio50.8%
Executive SummarySituation: Current price is $158.62 versus fair value $156.35 (-1.4% expected return), and valuation confidence is stable. Debate: Bull case depends on Pizza Hut strategic review completion with closures/restructuring, addressing underperformance (Q1 profit -15%) to refocus on Taco Bell/KFC growth and unlock algorithm execution. Bear case centers on Moat erosion via technological disruption or low-cost competitors impairing pricing power/ROIC from 17.1%. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Franchise moats yield 46.2% gross margins > peer 44.1%, Byte digital at 60% mix drives 25% growth, Taco Bell/KFC system sales +9%/+6% with ROIC 17.1% > WACC; $3.8B buybacks reduce shares -7.2% CAGR.
Bear Case
Pizza Hut review risks Q1 -15% profit/250 closures, commodity inflation compresses gross margins 130bps to 46.2%, high 4.0x leverage/negative equity amid insider $26.8M sales/no buys.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Pizza Hut strategic review completion with closures/restructuring, addressing underperformance (Q1 profit -15%) to refocus on Taco Bell/KFC...
Mid-Term (6-18 months)Impact: Critical
Byte platform international rollout accelerating digital to 70% mix, reducing stockouts 85%/failures 75% to boost franchise economics/unit g...
Long-Term (18+ months)Impact: Moderate
Ongoing Pizza Hut review and Q4 digital records amid margin pressures make now pivotal for moat validation and multiple re-rating.
Primary Risks
Concern: Medium
Moat erosion via technological disruption or low-cost competitors impairing pricing power/ROIC from 17.1%.
Concern: High
Leverage spike >5x EBITDA from debt-funded returns amid rising rates, triggering covenants (leverage <=5.0x).
Concern: Medium
Strong stewardship: LTIP PSUs 50% sales/50% profit growth + TSR modifier vs S&P 500 Consumer Discretionary, 50% NEO holding guidelines, hedg...
Recent Activity
2025-11-04SEC Filing (8-K)
+7.30%Yum! Brands reports Q3 2025 results with 15% EPS growth and announces strategic review of Pizza Hut.
2025-08-05SEC Filing (8-K)
-5.10%Yum! Brands reports Q2 2025 results with 4% system sales growth and record digital sales mix
2025-04-04Market Movement
-8.44%Market/Sector Move -8.44%
2025-02-06SEC Filing (8-K)
+9.72%Yum! Brands reports Q4 2024 results with 28% EPS growth and launches Byte by Yum! technology platform.
2021-07-29SEC Filing (8-K)
+6.28%Yum! Brands reports Q2 2021 results with 23% same-store sales growth and record unit development
Valuation Table
9.8/10Decision Grade
Scenario Range
$115
Bear
$2
Base
$182
Bull
$159