UPDATE: Goldman Sachs Upgrades Yum! Brands (YUM) to Buy

(Updated - July 18, 2022 4:16 AM EDT)

Goldman Sachs analyst Jared Garber upgraded Yum! Brands (NYSE: YUM) from Neutral to Buy with a price target of $135.00 (from $125.00).

The analyst comments "We upgrade YUM to Buy from Sell as the company’s highly-franchised model provides relative insulation from macro-volatility, while our analysis of market-by-market growth across YUM’s brands suggests the company can drive unit growth ahead of its LT algo (4-5%) for the next 2 years. While YUM shares have outperformed our coverage YTD (-15% vs restaurants -25%, franchised fast food -21%), we still see valuation support from relative valuation vs MCD and free cash flow/dividend yield vs peers, and view the model as defensive in a slowing macro backdrop. Further, we see upside tailwinds from China re-opening trends, and while trends in the market are likely to remain volatile, the franchise structure means choppy re-opening trends present lower risk to YUM’s overall earnings profile."

For an analyst ratings summary and ratings history on Yum! Brands click here. For more ratings news on Yum! Brands click here.

Shares of Yum! Brands closed at $118.15 yesterday.

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