- Taco Bell US same-store sales grew 9.0%.
- Yum! Brands continues to balance innovation with value.
- A new wave of value and momentum stocks could be setting up for major moves—and Tim Melvin will name them live this Wednesday. Secure access here.
Shares of Yum! Brands Inc YUM remained under pressure after the company announced Wednesday downbeat first-quarter sales.
Here are some key analyst takeaways.
- Piper Sandler analyst Brian Mullan reiterated a Neutral rating, while reducing the price target from $150 to $155.
- TD Cowen analyst Andrew Charles maintained a Hold rating and price target of $158.
- KeyBanc Capital Markets analyst Eric Gonzalez reaffirmed a Sector Weight rating on the stock.
Check out other analyst stock ratings.
Piper Sandler: Yum! Brands' quarterly results were largely in line with expectations, Mullan said in a note. The performance of Taco Bell US continued to stand out, with same-store sales growth of 9.0%, "meaningfully out-performing the QSR category," he added.
The brand seems "well positioned to navigate the current macro from here," the analyst wrote. Management expressed confidence in the company's ability to generate 8% adjusted operating profit growth in 2025.
TD Cowen: The first-quarter results did not change Yum! Brands' story, which "features Taco Bell outperformance & Pizza Hut underperformance," Charles said. He added that low-single-digit growth in traffic was a positive, and management indicated trends at Taco Bell had continued into April.
The analyst raised the second-quarter estimate for same-store sales growth from 4% to 5%. "The company’s playbook of balancing innovation with value continues to out-execute quick service peers, and should continue in 2Q with the return of the previously successful Crispy Chicken Nuggets," he further wrote.
KeyBanc Capital Markets: Taco Bell delivered same-store sales growth above the company's 8% guidance, "proving its resilience in the current environment," Gonzalez said. Pizza Hut continued to struggle, particularly in the US, while KFC's global same-store sales growth exceeded expectations, "helped by a recovery in key international markets," he added.
Yum! Brands expects 2025 to be "an algorithm year, with core operating profit growth of 8% despite unit growth decelerating to ~4% due to closures in Turkey, which will have an immaterial impact on profit growth," the analyst further wrote.
YUM Price Action: Shares of Yum! Brandshad declined by 1.42% to $148.31 at the time of publication on Thursday.
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