Taco Bell Parent Yum Brands Under Pressure, Expects Chicken Nuggets To Drive Q2 Traffic

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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