Valued at a market cap of $38.6 billion, Yum! Brands, Inc. (YUM) develops, operates, and franchises quick service restaurants under its KFC, Pizza Hut, Taco Bell, and Habit Burger Grill brand names. The Louisville, Kentucky-based company specializes in chicken, pizza, made-to-order chargrilled burgers, sandwiches, and Mexican-style food categories.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and Yum! Brands fit right into that category with its market cap exceeding this threshold. The fast-food chain owns, operates, and franchises restaurants in more than 150 countries and territories and exercises store-level franchise and master franchise programs to grow its businesses.
YUM has slipped 3.5% from its 52-week high of $143.20, achieved on Apr. 29. Shares of YUM have gained 4% over the past three months, lagging behind the broader Dow Jones Industrials Average’s ($DOWI) 8.6% gains over the same time frame.
Moreover, in the longer term, YUM has gained 5.8% on a YTD basis, underperforming DOWI’s 17.4% returns. Shares of YUM are up 11.2% over the past 52 weeks, lagging behind DOWI’s 22.1% gains over the same time frame.
Yet, YUM stock appears to be trading above its 200-day and 50-day moving average since late November.
On Nov. 5, YUM shares gained 1.5% following its Q3 earnings release despite delivering a weaker-than-expected performance. The company’s revenue of $1.83 billion increased 7% from a year ago but missed the consensus estimates of $1.89 billion. Soft contributions from the company’s Pizza Hut division partially offset the robust performance of its Taco Bell and KFC divisions. Moreover, its adjusted earnings declined 4.9% year-over-year to $1.37 per share and fell short of the forecasted figure by 2.8%.
Yet, YUM has outperformed its rival, McDonald's Corporation (MCD), which gained 5.3% over the past 52 weeks and 1.4% on a YTD basis.
Although YUM has recently underperformed the broader market, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 27 analysts covering it, and the mean price target of $144.30 suggests a 4.4% premium to its current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart- Why Wall Street Rates These 2 Russell 2000 Stocks a “Strong Buy”
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