UPDATE: Bernstein Starts Yum! Brands (YUM) at Outperform
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Bernstein analyst Danilo Gargiulo initiates coverage on Yum! Brands (NYSE: YUM) with a Outperform rating and a price target of $144.00.
The analyst comments "Yum! Brands: A great rowing team in international waters (YUM, Outperform, TP $144, +28% potential upside). We expect KFC's cumulative 5-year sales from international markets ex-China to generate sales equivalent to the size of China today. We like Taco Bell's global brand, digital engagement and appeal to Gen-Z, and believe its international flywheel is about to spin. At the same time, we are cautious about Pizza Hut's outlook but its transformation into a more LSR-ready concept leaves room for upside. Besides, being the biggest restaurant world in the market, Yum has the best opportunities to integrate capabilities across brands and unlock the next leg of digital expansion. We expect digital mix to reach 52% by 2026 meaningfully contributing to a 3.5%-4% global comp growth by 2026. We expect a strong EPS NTM expansion of 23%, a multiple of 23x, leading to a 1-year TP for YUM at $144, driving a 28% stock upside compared to today."
Shares of Yum! Brands closed at $112.56 yesterday.
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