Yum! Brands delivers consistent earnings growth through a high-quality franchise model with strong margins and cash generation, but the stock trades near its analyst price target, leaving minimal near-term upside for new buyers.
Thesis pillars
- High Quality Margins Cash Conversion→Stable
- Valuation At Analyst Target→Stable
- Franchise Earnings Beat Streak↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 20, 2026
Yum! Brands, Inc. (YUM) Stock Analysis
Recovery setup
Consumer Cyclical · Restaurants
Sell if holding. Analyst target reached at $150.16 — A.R:R 0.2:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Consumer Cyclical): -1.5.
Yum! Brands franchises 63,285 KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill restaurants across 155 countries with 97% of units franchised. Royalties of 4%–6% of restaurant sales plus technology and franchise fees drive revenue; system-wide sales reached $68.3 billion in... Read more
Sell if holding. Analyst target reached at $150.16 — A.R:R 0.2:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Consumer Cyclical): -1.5. Chart setup: Death cross but MACD improving, RSI 67. Score 6.0/10, moderate confidence.
Passes 5/10 gates (positive momentum, clean insider activity, news events none recent, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio and death cross (50MA < 200MA) and earnings proximity 5d<=7d. Suitability: moderate.
About Yum! Brands, Inc.
About Yum! Brands, Inc.
Yum! Brands operated 63,285 restaurants in 155 countries at December 31, 2025, with 72% of units outside the United States. System sales totaled $68.3 billion in 2025, and digital sales approached $40 billion, representing nearly 60% of overall system sales. KFC led with 33,897 units and $36.4 billion in system sales; Taco Bell generated $18.4 billion from 9,030 locations globally.
Yum! Brands earns revenue almost entirely through franchise royalties and fees. Under store-level agreements, franchisees pay monthly continuing fees of 4% to 6% of restaurant sales; under master franchise arrangements covering about 40% of franchised units, master franchisees retain a portion of sub-franchisee fees and often pay lower rates. Yum China, the largest master franchisee, operates over 17,000 units in mainland China and pays a 3% license fee on system sales for KFC, Pizza Hut, and Taco Bell in that market. McLane Foodservice distributes the majority of items to Company-owned U.S. restaurants and a substantial share of franchisee restaurants, while the company and U.S. franchisee groups collectively purchase through Restaurant Supply Chain Solutions, LLC. The company's approximately 49,000 direct employees are concentrated in restaurant operations, with roughly 90% of U.S. restaurant staff part-time.
Show full overview
Yum! Brands initiated a strategic options review for the Pizza Hut brand in 2025 and plans to complete the review in 2026. The 10-K acknowledges meaningful execution risks: management distraction, potential disruption to franchisee relationships, and an uncertain outcome on timing and terms. Pizza Hut's 19,974 units generated $12.8 billion in system sales in 2025, representing a material share of system scale. If a transaction alters royalty rates or reduces the unit count, earnings could concentrate further in KFC and Taco Bell.
See also: Consumer Cyclical · Restaurants
From Yum! Brands, Inc.'s most recent 10-K filing, extracted June 16, 2026.
Recent developments
updated 2026-10-29Recent Developments — Yum! Brands, Inc.
Latest news
- NEWS Yum Brands Stock Drops After Taco Bell Parasite Sickens Nearly 2,000 - Briefs Finance — Briefs Finance negative
- NEWS Cyclospora outbreak tied to Taco Bell will steal the spotlight from Yum Brands' earnings - CNBC — CNBC negative
- NEWS Cyclospora outbreak tied to Taco Bell will steal the spotlight from Yum Brands' earnings - cnbc.com — cnbc.com negative
- NEWS Earnings To Watch: Yum! Brands (YUM) Reports Q2 Results Tomorrow - StockStory — StockStory neutral
- NEWS Taco Bell-parent Yum tops quarterly estimates as value deals fuel demand - Reuters — Reuters positive
Generated 2026-10-29T11:14:36Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMCustomerYum China10-K Item 1A: 'significant exposure to the Chinese market through our largest franchisee, Yum China'
- MEDIUMSupplierMcLane Foodservice10-K Item 1: 'McLane Foodservice, Inc. is the distributor for the majority of items used in Company-owned restaurants and for a substantial number of franchisee restaurants'
Material Events(8-K, last 90d)
- 2026-06-02Item 5.02MEDIUMCOO and Chief People & Culture Officer Tracy Skeans to transition from roles effective November 1, 2026, then serve as Senior Advisor through retirement March 1, 2028. No successor named for COO or CPCO roles.SEC filing →
- 2026-04-01Item 5.02LOWBoard appointed Kathleen K. Oberg as director effective April 1, 2026; will stand for election at next Annual Meeting. No committee appointment made at time of filing.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
10 dimensions · all in-band
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Analyst target reached at $150.16 — A.R:R 0.2:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Consumer Cyclical): -1.5. Chart setup: Death cross but MACD improving, RSI 67. Prior stop was $143.48. Score 6.0/10, moderate confidence.
Analyst target: $153.55 (+2.3% upside). Prior stop was $143.48. Stop-loss: $143.48.
Analyst target reached - limited upside remaining; Sector modifier (Consumer Cyclical): -1.5; Earnings in 5 days (event risk).
Yum! Brands, Inc. trades at a P/E of 18.9 (forward 22.0). TrendMatrix value score: 5.2/10. Verdict: Sell.
32 analysts cover YUM with a consensus score of 3.7/5. Average price target: $171.
What does Yum! Brands, Inc. do?Yum! Brands franchises 63,285 KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill restaurants across 155 countries with...
Yum! Brands franchises 63,285 KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill restaurants across 155 countries with 97% of units franchised. Royalties of 4%–6% of restaurant sales plus technology and franchise fees drive revenue; system-wide sales reached $68.3 billion in 2025, with digital sales approaching $40 billion.