Yum! Brands EPS Expected to Rise Amid Mixed Analyst Ratings

Earnings Growth Ahead for Yum! Brands. Analysts anticipate an EPS increase of 26.2% for Q4 and a 5.6% rise in fiscal 2024, even amid mixed quarterly performances. The outlook reflects cautious optimism, with prices currently below analyst targets.

Date: 15-01-2025

AI Rating: 6

Yum! Brands, Inc. is gearing up for its upcoming fiscal Q4 earnings report, expected to announce a profit of $1.59 per share, representing a significant increase of 26.2% compared to $1.26 per share from the same quarter last year. While the company has shown potential in its year-over-year earnings growth, it has faced challenges in exceeding analysts' expectations. In fact, YUM surpassed Wall Street's bottom-line estimates in only one of the past four quarters.

Looking ahead, analysts are forecasting an EPS of $5.46 for fiscal 2024, which would mark an increase of 5.6% from the prior fiscal year’s EPS of $5.17. Furthermore, projected EPS shows promising growth of 9.9% year-over-year, anticipating reaching $6 in fiscal 2025. This trend of rising earnings is a positive sign for potential investors.

Despite reporting weaker-than-expected Q3 adjusted EPS of $1.37 and revenue of $1.8 billion, Yum! saw its shares rise by 1.5%, indicating that investors may have been encouraged by expansion efforts. The company opened 685 new KFC locations and 49 Taco Bell units, showcasing robust unit expansion globally. Their adoption of innovative technologies, such as Drive-Thru Voice AI at Taco Bell, emphasizes its focus on enhancing customer experiences.

Analysts maintain a cautiously optimistic stance on YUM stock, reflected in a current consensus rating of Moderate Buy. Among 27 analysts, seven have indicated a Strong Buy rating, while one has a Moderate Buy, and the remaining 19 recommend a Hold. This perspective denotes a slight decrease in bullish sentiment compared to a few months back when more analysts were supporting a Strong Buy rating.

Lastly, YUM's current trading position is notably below the average analyst price target of $144.79, which may signify an opportunity for investors if growth projections hold true.

Stocks: YUM