Yum Brands Stock (NYSE:YUM), Trade Ideas

Yum Brands

Yum Brands is a U.S.-based restaurant operator featuring a portfolio of four brands: KFC (29,900 global units at year-end 2023), Pizza Hut (19,866 units), Taco Bell (8,564 units), and The Habit Burger Grill (381 units). With $64 billion in 2023 systemwide sales, the firm is the second-largest restaurant company in the world behind McDonald's ($130 billion), ahead of Restaurant Brands International and Starbucks ($29 billion). Yum is 98% franchised, with the largest franchisee, Yum China, spun out in 2016 (after which Yum China agreed to pay 3% royalties to Yum Brands in perpetuity). Yum is the newest evolution of Tricon, formerly a division of PepsiCo, and generates the bulk of its revenue from franchise royalties and marketing contributions.

fast food ai

Restaurants

JACK

PZZA

SBUX

Some fast food joints are cutting employee hours. Others are installing digital order kiosks — a trend that was already in full swing.

Not-So-Happy Meal: $20 Wages Has Burger Joints In This State All Heated

News

Tech

Yum Brands to adopt AI-first mentality in its fast food chains to boost sales and personalize customer experience. AI will revolutionize operations.

AI Gunning For Fast Food Jobs Next? KFC, Taco Bell Operator Yum Brands Planning ChatGPT-Like Bots To Boost Operations

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On Monday, Domino’s Pizza Inc (NYSE: DPZ) delivered a profit beat with its financials being fueled by its innovative “emergency pizza” offer.

Domino&#39;s Reinstated Its Pizza King Title

Yum Brands Inc

Yuma Energy Inc

Yum China Holdings Inc

YUMY CANDY CO INC by The Yumy Candy Company Inc.

The Yumy Candy Co Inc

Yummies Inc

YUMMY

Demae-Can Co Ltd

VanEck Vectors ETF Trust ETF Trust VanEck Future of Food ETF

Citigroup analyst Jon Tower maintains Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Buy and lowers the price target from $166 to $162.

Price Target

Analyst Ratings

Citigroup Maintains Buy on Yum Brands, Lowers Price Target to $162

Yum Brands's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) short percent of float has risen 4.98% since its last report. The company recently reported that it has 7.10 million shares sold short, which is 2.53% of all regular shares that are available for trading. Based on its trading volume, it would take traders 3.87 days to cover their short positions on average.
<h3>Why Short Interest Matters</h3>
Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.
See Also: <a href="https://www.benzinga.com/short-interest">List of the most shorted stocks</a>
<h3>Yum Brands Short Interest Graph (3 Months)</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1713809717_0.png" alt="short_fig" />
As you can see from the chart above the percentage of shares that are sold short for Yum Brands has grown since its last report. This does not mean that the stock is going to fall in the near-term but traders should be aware that more shares are being shorted.
<h3>Comparing Yum Brands's Short Interest Against Its Peers</h3>
Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.
According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, Yum Brands's peer group average for short interest as a percentage of float is 9.49%, which means the company has less short interest than most of its peers.
Did you know that increasing short interest can actually be bullish for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/">This post by Benzinga Money explains how you can profit from it.</a>
This article was generated by Benzinga's automated content engine and was reviewed by an editor.

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How Is The Market Feeling About Yum Brands?

<a href="https://www.benzinga.com/general/24/01/36493680/mcdonalds-18-big-mac-meal-goes-viral-again-as-fast-food-minimum-wage-hike-to-20-triggers-fears-of-sk">California fast-food employees</a> started earning a minimum of $20 an hour in April.
Thanks to a new law, which went into effect earlier this month, California chain restaurants with at least 60 locations nationwide have to pay their employees more. 
For smaller restaurants, the minimum wage continues to be the statewide bottom of $16 an hour.
The largest publicly-traded fast-food companies include McDonald&#8217;s Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MCD#NYSE">MCD</a>); Starbucks Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SBUX#NASDAQ">SBUX</a>); Yum! Brands, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>), which owns Taco Bell, Pizza Hut and KFC; Wendys Co (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WEN#NASDAQ">WEN</a>); Restaurant Brands International Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/QSR#NYSE">QSR</a>), which owns Burger King; Chipotle Mexican Grill, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CMG#NYSE">CMG</a>); Papa John&#8217;s International Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PZZA#NASDAQ">PZZA</a>) and Jack in the Box Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/JACK#NASDAQ">JACK</a>).
Many of these stocks have lost value since the law was implemented on April 1.
Read Also: <a href="https://www.benzinga.com//node/38083611">AI Gunning For Fast Food Jobs Next? KFC, Taco Bell Operator Yum Brands Planning ChatGPT-Like Bots To Boost Operations</a>
The wage hikes were deemed necessary in the Golden State. After all, the <a href="https://www.rentcafe.com/cost-of-living-calculator/us/ca/">cost of living in California</a> is about 38% higher than the national average.
Some fast food companies are considering cutting employee hours and raising menu prices. 
In-N-Out Burger President Lynsi Snyder said in an <a href="https://www.today.com/video/in-n-out-burger-president-shares-story-behind-family-run-business-208611397732">interview</a> with Today that she "was sitting in VP meetings going toe-to-toe saying, ‘We can't raise the prices that much, we can't.&#8217;"
Her company, which owns over 400 restaurants — primarily in California — continues to be privately held. Snyder said there are no plans to go public or open up to the franchise model.
In-N-Out has, however, raised prices in Los Angeles restaurants by about 25 cents per burger. That&#8217;s still less than the price hikes other restaurants had to implement. 
According <a href="https://nypost.com/2024/04/11/business/in-n-out-president-lynsi-snyder-went-toe-to-toe-to-keep-menu-prices-down/">to</a> the New York Post, one Burger King in Los Angeles raised the price of its Double Texas Whopper by 12% from $15.09 to $16.89.
Many restaurant chains started preparing for wage hikes, even before the law was passed last September. Some companies are exploring automation as a strategy — a <a href="https://www.businessinsider.com/what-self-serve-kiosks-at-mcdonalds-mean-for-cashiers-2017-6">trend</a> that took off in 2017 with self-service ordering kiosks.
Insider <a href="https://www.businessinsider.com/california-fast-food-minimum-wage-order-kiosks-burger-king-popeyes-2024-4">reported</a> that some restaurant franchises, including a major Burger King franchise, are ordering new digital order kiosks to replace existing staff.
Burger King management recently pointed out that customers tend to order larger meals whenever interacting with digital self-service screens.
In October, after California Gov. Gavin Newsom signed the law, McDonald&#8217;s CEO Chris Kempczinski said on the company's third-quarter earnings call he expected the policy to "certainly be a hit in the short term to franchisee cashflow."
Yet the secondary effects of the new law could even replicate into further trouble for the fast food segment in the Golden State. A Jack in the Box franchise owner speculated on Sunday in an <a href="https://www.businessinsider.com/fast-food-california-expensive-diners-could-switch-to-chilis-applebees-2024-4">interview</a> with Business Insider that rising prices for fast food chains could mean a loss in market share to casual diners like Chili&#8217;s, owned by Brinker International, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EAT#NYSE">EAT</a>) or Applebee&#8217;s, a subsidiary of Dine Brands Global Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIN#NYSE">DIN</a>).
Casual dining restaurants could, in turn, benefit if they're able to keep running without altering prices.
Now Read: <a href="https://www.benzinga.com//node/37407897">Wendy&#8217;s Clarifies &#8216;Dynamic Pricing&#8217; Comments After Public Outcry, Elizabeth Warren Criticism</a>
Image from MidJourney AI.

TD Cowen analyst Andrew Charles reiterates Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Buy and maintains $160 price target.

Reiteration

TD Cowen Reiterates Buy on Yum Brands, Maintains $160 Price Target

Argus Research analyst John Staszak downgrades Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) from Buy to Hold.

Downgrades

Argus Research Downgrades Yum Brands to Hold

Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>), the parent company of fast food chains like Taco Bell, Pizza Hut, KFC, and Habit Burger Grill, is set to revolutionize its operations by adopting an &#8220;AI-first mentality.&#8221;
What Happened: As detailed in an <a href="https://arstechnica.com/information-technology/2024/04/ai-hype-invades-taco-bell-and-pizza-hut/">Ars Technica article</a>, Yum&#8217;s commitment to AI will span across all facets of the consumer experience. Joe Park, the company&#8217;s chief digital and technology officer, envisions an AI-driven quick-service restaurant operation.
Yum Brands has significantly ramped up its technology and automation investments, with approximately 45% of its sales now stemming from online and app-based ordering and delivery services. The company plans to use AI to profile customers, present personalized offers, boost sales, and attract new patrons.
See Also: <a href="https://www.benzinga.com/markets/equities/24/04/38050032/jeff-bezos-convinced-his-siblings-to-invest-10k-each-in-his-online-startup-called-amazon-heres-h?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Jeff Bezos Convinced His Siblings To Invest $10K Each In His Online Startup Called Amazon — Here&#8217;s How Mu</a>
AI is slated to permeate every aspect of Yum&#8217;s restaurants—from AI-assisted franchisees to AI-powered kitchen management and delivery platforms. To streamline operations, Yum is experimenting with a ChatGPT-like chatbot for restaurant managers and exploring customer-oriented applications like voice AI for drive-through orders and image recognition to monitor waiting times.
Despite fears over potential job displacement due to AI and automation adoption, Yum Brands emphasizes the crucial role of its employees in the company&#8217;s operations. The company also investigates digitally linked and managed kitchen appliances to optimize operations further.
Why It Matters: This move by Yum Brands comes amid a broader debate about the actual potential and hype surrounding AI. Recently, prominent figures in the industry, such as Mark Zuckerberg and Sam Altman, were <a href="https://www.benzinga.com/news/24/04/38054886/jon-stewart-roasts-bait-and-switch-ai-hype-from-zuckerberg-pichai-altman-and-other-silicon-valley-ch">humorously criticized by Jon Stewart</a> for their lofty promises about AI&#8217;s potential. Meanwhile, the co-founder of Google DeepMind, Sir Demis Hassabis, <a href="https://www.benzinga.com/news/24/04/38017024/google-deepmind-co-founder-voices-concerns-over-ai-hype-were-talking-about-all-sorts-of-things-that">expressed concerns</a> that the surge in AI funding leads to overstated hype that overshadows the actual scientific progress in the sector. Yum Brands&#8217; AI-first approach will put these theories to the test, demonstrating whether AI can truly redefine the fast food experience.
Price Action: YUM shares traded lower by 1.21% at $139.01 at market close on Wednesday.
Photo via Wikimedia Commons
Read Next: <a href="https://www.benzinga.com/news/24/03/38013068/tesla-ceo-elon-musk-reacts-to-apple-co-founder-steve-jobs-on-finding-top-talent-you-build-up-these-p?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Tesla CEO Elon Musk Reacts To Apple Co-Founder Steve Jobs On Finding Top Talent: &#8216;You Build Up These Pock</a>
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Yum Brands's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) short percent of float has fallen 12.39% since its last report. The company recently reported that it has 5.37 million shares sold short, which is 1.91% of all regular shares that are available for trading. Based on its trading volume, it would take traders 3.34 days to cover their short positions on average.
<h3>Why Short Interest Matters</h3>
Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.
See Also: <a href="https://www.benzinga.com/short-interest">List of the most shorted stocks</a>
<h3>Yum Brands Short Interest Graph (3 Months)</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1711043120_0.png" alt="short_fig" />
As you can see from the chart above the percentage of shares that are sold short for Yum Brands has declined since its last report. This does not mean that the stock is going to rise in the near-term but traders should be aware that less shares are being shorted.
<h3>Comparing Yum Brands's Short Interest Against Its Peers</h3>
Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.
According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, Yum Brands's peer group average for short interest as a percentage of float is 9.86%, which means the company has less short interest than most of its peers.
Did you know that increasing short interest can actually be bullish for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/">This post by Benzinga Money explains how you can profit from it.</a>
This article was generated by Benzinga's automated content engine and was reviewed by an editor.

(YUM) - Analyzing Yum Brands's Short Interest

JP Morgan analyst John Ivankoe maintains Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Neutral and raises the price target from $133 to $134.

JP Morgan Maintains Neutral on Yum Brands, Raises Price Target to $134

TD Cowen analyst Andrew Charles maintains Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Outperform and raises the price target from $144 to $160.

TD Cowen Maintains Outperform on Yum Brands, Raises Price Target to $160

Guggenheim analyst Gregory Francfort maintains Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Buy and raises the price target from $145 to $155.

Guggenheim Maintains Buy on Yum Brands, Raises Price Target to $155

On Monday, Domino&rsquo;s Pizza Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dpz#NYSE">DPZ</a>) delivered a profit beat with its financials being fueled by its innovative &ldquo;emergency pizza&rdquo; offer. Its stock jumped as it&nbsp;hiked its quarterly dividend by 25% while also announcing a $1 billion buyback.&nbsp;research firm M Science reported that in December, Domino&rsquo;s held a 19% market share among pizza chains on the Uber Technologies Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uber#NYSE">UBER</a>) Uber Eats platform.&nbsp;
However, like its fast-food chain peers,&nbsp;McDonald&#39;s Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mcd#NYSE">MCD</a>) and KFC-parent Yum Brands Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/yum#NYSE">YUM</a>), Domino&rsquo;s also reported it suffered an impact from the raging conflict in the Middle East. Like McDonald&rsquo;s and Yum Brands, Domino&rsquo;s has found itself amid U.S. brands being shunned by consumers in light of the U.S. supporting Israel&rsquo;s invasion of Gaza. At the end of January,&nbsp;Domino&#39;s franchisee that operates its restaurants in Australia, Europe, and Asia&nbsp;reported that same-store sales in Asia alone contracted about&nbsp;8.9% during the second half of 2023. McDonald&rsquo;s didn&rsquo;t disclose the exact impact of boycotts on its sales, but did acknowledge the conflict created societal pressure in the countries it operates. Therefore, Domino&rsquo;s not alone in facing the backlash, with McDonalds, Yum Brands and Starbucks Corporation (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sbux#NASDAQ">SBUX</a>) also being among U.S. brands that some customers in the&nbsp;Middle East and Asia turned their back on.
<h3>Fourth Quarter Highlights</h3>
Revenue rose 0.8% to $1.40 billion. U.S. same-store-sales grew 2.8% with international same-store-sales rose merely 0.1%, excluding currency impacts.&nbsp;Domino&rsquo;s Pizza reported a strong performance on both sales fronts:delivery and carryout.&nbsp;Its&nbsp;rewards program increased by 10% and ended 2023 with 3 million active members. What&rsquo;s more impressive is that more than 2 million joined after the revamping of the rewards program that also boosted profit at franchises.&nbsp;Domino&rsquo;s Pizza logged a&nbsp;net income of $157.3 million, or $4.48 a share. Despite higher wages and costs related to its revamping initiative&nbsp;that dented margins of its U.S. company-owned stores, lowered&nbsp;food costs drove quarterly earnings per share to $4.48, topping estimates of $4.38.
Uber Eats partnership is paying immediate dividends.
Joining hands with Uber was a wise call, one that delivered on its promise.&nbsp;
Revamping its loyalty program did the trick and sales were revived after struggling with a slowdown in the beginning of 2023. The delivery partnership with Uber helped Domino&rsquo;s lure in new customers and is expected to continue doing so throughout 2024 as well.
DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.
This article is from an unpaid external contributor. It does not represent Benzinga&#39;s reporting and has not been edited for content or accuracy.

Domino's Reinstated Its Pizza King Title

Despite <a href="https://www.benzinga.com/news/earnings/24/02/36987082/whats-going-on-with-yum-brands-stock-today">an earnings miss reported on Feb. 7</a>, YUM! Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) — the owner of KFC (Kentucky Fried Chicken), Pizza Hut, Taco Bell, and The Habit Burger Grill — is gaining investor confidence.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/22094946/YUM-with-SMAs-Golden-Cross.png" alt="" class="wp-image-225533" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/22094946/YUM-with-SMAs-Golden-Cross.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/22094946/YUM-with-SMAs-Golden-Cross-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
The fast-food conglomerate is known for operating several <a href="https://www.benzinga.com/general/restaurants">well-known restaurant chains</a>. Its stock has been more or less range-bound between $120-$140 over the past year. 
Year-to-date, Yum stock is up 3.5%.
&#8220;Looking to 2024, this will be a year of major milestones as we cross 30,000 restaurants at KFC, 20,000 at Pizza Hut and well over 60,000 globally for Yum!&#8221; <a href="https://mms.businesswire.com/media/20240205092538/en/2024926/1/Q4_2023_Earnings_Release.pdf?download=1&amp;_gl=1&#x2A;11l3fdo&#x2A;_ga&#x2A;ODA5OTMwODc5LjE3MDg2MDk1MzA.&#x2A;_ga_ZQWF70T3FK&#x2A;MTcwODYwOTUzMC4xLjAuMTcwODYwOTU1My4zNy4wLjA.">said</a> CEO David Gibbs with the earnings announcement.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/22094956/YUM-Golden-Cross-close-up-1.png" alt="" class="wp-image-225534" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/22094956/YUM-Golden-Cross-close-up-1.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/22094956/YUM-Golden-Cross-close-up-1-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
<h2 class="wp-block-heading">Golden Cross Suggests Shift In Trend To Bullish</h2>
Investor optimism around Yum&#8217;s prospects for 2024 has also led the stock to make a Golden Cross on the price chart. The 50-day simple moving average (SMA) (yellow line above) has crossed over the 200-day SMA, signaling bullish sentiments setting in.
The Golden Cross suggests a potential shift in trend from a bearish to a bullish direction. It indicates that the average price over the short term is starting to outpace the average price over the long term, which could signify a strengthening in the asset&#8217;s price momentum.
Traders often use the Golden Cross as a buy signal, interpreting it as a sign that the underlying asset&#8217;s price may continue to rise. However, like any technical indicator, investors need to consider other factors and use additional analysis to make well-informed decisions.
Wall Street analysts who reviewed the stock have a consensus Overweight rating on the stock with a price target of $144.35. Analysts who reviewed the stock over January-February have largely maintained their ratings. Price targets from recent reviews range between $133 to $166 a share.
YUM Price Action: YUM stock was trading at $135.95 at the time of publication.
Now Read: <a href="https://www.benzinga.com/news/earnings/24/02/37261939/nvidia-market-cap-nears-2-trillion-why-tech-giant-has-become-an-understatement">Nvidia Market Cap Nears $2 Trillion &#8211; Why &#8216;Tech Giant&#8217; Has Become An Understatement</a>
Image: Wikimedia

Technicals

Golden Cross Alert: Yum! Brands Stock Sizzles, Leaving Investors Hungry For More

JP Morgan analyst John Ivankoe maintains Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Neutral and raises the price target from $130 to $133.

JP Morgan Maintains Neutral on Yum Brands, Raises Price Target to $133

RBC Capital analyst Christopher Carril maintains Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Sector Perform and lowers the price target from $145 to $141.

RBC Capital Maintains Sector Perform on Yum Brands, Lowers Price Target to $141

Barclays analyst Jeffrey Bernstein maintains Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Overweight and lowers the price target from $146 to $144.

Barclays Maintains Overweight on Yum Brands, Lowers Price Target to $144

<a href="https://www.reuters.com/markets/deals/flynn-group-worlds-largest-franchisee-explores-5-bln-plus-sale-sources-2024-02-08/">https://www.reuters.com/markets/deals/flynn-group-worlds-largest-franchisee-explores-5-bln-plus-sale-sources-2024-02-08/</a>
Flynn Group, the world's largest franchisee operator of restaurants and fitness clubs, is exploring a majority stake sale that could value it at more than $5 billion, including debt, according to people familiar with the matter.
Flynn Group, which operates Applebees, Taco Bell, Panera Bread, Arby's, Pizza Hut, Wendy's and Planet Fitness franchises, is working with Bank of America <a href="https://www.reuters.com/markets/companies/BAC.N">(BAC.N), opens new tab</a> on a sale process, the sources said.
Flynn Group, which is based in San Francisco, generates over $450 million of annual earnings before interest, taxes, depreciation and amortization, according to the sources.
Private equity firms and sovereign wealth funds are among the suitors for the majority stake that is up for sale, added the sources, who requested anonymity because the matter is confidential.
Ontario Teachers' Pension Plan (OTPP) and private equity firm Main Post Partners, which are investors in Flynn Group, could sell part of their stakes and remain invested following a deal, according to the sources.
Flynn Group's management, who are also significant shareholders, may do the same, the sources added.
OTPP owns around a third of Flynn Group, Main Post owns slightly over a third, and Flynn management owns the rest, the sources said.
Representatives for Flynn Group, OTPP, Main Post and Bank of America declined to comment.
Founded in 1999 by commercial real estate investor Greg Flynn, the eponymous company operates over 2,600 restaurants and fitness clubs in the U.S. and Australia, generating over $4.5 billion in annual sales, according to its website.
In 2014, Ontario Teachers invested approximately $300 million in the company, valuing it at over $1 billion.

Asset Sales

'Flynn Group, World's Largest Franchisee, Explores $5B+ Sale' - Reuters News

Citigroup analyst Jon Tower maintains Yum Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/YUM#NYSE">YUM</a>) with a Buy and raises the price target from $164 to $166.

Citigroup Maintains Buy on Yum Brands, Raises Price Target to $166

U.S. stocks traded higher toward the end of trading, with the Dow Jones index gaining more than 150 points on Wednesday.
The Dow traded up 0.47% to 38,701.01 while the NASDAQ rose 0.89% to 15,748.69. The S&amp;P 500 also rose, gaining, 0.82% to 4,994.75.
Check This Out: <a href="https://www.benzinga.com/trading-ideas/long-ideas/24/02/36978503/top-5-energy-stocks-that-may-explode-in-february"> Top 5 Energy Stocks That May Explode In February </a>
&nbsp;
<h3>Leading and Lagging Sectors</h3>
&nbsp;
Consumer discretionary shares rose by 1.1% on Wednesday.
In trading on Wednesday, energy shares fell by 0.2%.
&nbsp;
<h3>Top Headline</h3>
&nbsp;
Yum! Brands Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/yum#NYSE">YUM</a>) reported weaker-than-expected results for its fourth quarter on Wednesday.
The company posted fourth-quarter fiscal 2023 sales growth of 1% year-on-year to $2.04 billion, missing the analyst consensus estimate of $2.11 billion. Adjusted EPS was $1.26, below the consensus of $1.40.
<h3>
Equities Trading UP</h3>
&nbsp;
MicroCloud Hologram Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/holo#NASDAQ">HOLO</a>) shares shot up 497% to $8.95. The company announced it planned to join the Communications Industry Association. HOLO intends to join the Communications Industry Association to foster information technology innovation.
Shares of Glatfelter Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/glt#NYSE">GLT</a>) got a boost, surging 72% to $2.20 after the company and Berry Global announced they entered into definitive agreements for Berry to spin-off and merge the majority of its Health, Hygiene and Specialties segment to include its Global Nonwovens and Films business with Glatfelter.
Aviat Networks, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/avnw#NASDAQ">AVNW</a>) shares were also up, gaining 25% to $37.47 after the company reported better-than-expected second-quarter financial results and issued FY24 revenue guidance above estimates.
&nbsp;
<h3>Equities Trading DOWN</h3>
&nbsp;
Triumph Group, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tgi#NYSE">TGI</a>) shares dropped 18% to $13.46 after the company reported below-consensus third-quarter results and cut the FY24 outlook.
Shares of The Container Store Group, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tcs#NYSE">TCS</a>) were down 41% to $0.9998 following weak quarterly results.
Snap Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/snap#NYSE">SNAP</a>) was down, falling 35% to $11.30 after the company reported mixed quarterly results.
Also Check This Out:<a href="https://www.benzinga.com/news/24/02/36981099/spotify-to-rally-around-36-here-are-10-top-analyst-forecasts-for-wednesday"> Spotify To Rally Around 36%? Here Are 10 Top Analyst Forecasts For Wednesday </a>
&nbsp;
<h3>Commodities</h3>
&nbsp;
In commodity news, oil traded up 0.8% to $73.89&nbsp;while gold traded mostly flat at $2,051.10.
Silver traded down 0.5% to $22.365 on Wednesday while copper fell 1.2% to $3.7365.
&nbsp;
<h3>Euro zone</h3>
&nbsp;
European shares were lower today. The eurozone&rsquo;s STOXX 600 fell 0.23%, London&rsquo;s FTSE 100 fell 0.68% while Spain&rsquo;s IBEX 35 Index fell 1.15% The German DAX fell 0.65% French CAC 40 fell 0.36% while Italy&rsquo;s FTSE MIB Index fell 0.45%.
France&rsquo;s current account deficit shrank to EUR 0.7 billion in December versus a revised EUR 2.9 billion in the prior month, while trade deficit increased to &euro;6.83 billion in December from a &euro;5.9 billion gap in the previous month.
The Halifax House Price Index rose by 2.5% year-over-year in January, while German industrial output declined by 1.6% month-over-month in December.
&nbsp;
<h3>Asia Pacific Markets</h3>
&nbsp;
Asian markets closed mixed on Wednesday, with Japan&rsquo;s Nikkei 225 falling 0.11%, Hong Kong&rsquo;s Hang Seng Index falling 0.34% and China&rsquo;s Shanghai Composite Index gaining 1.44%. India&rsquo;s S&amp;P BSE Sensex, meanwhile, fell 0.06%.
China&#39;s vehicle sales climbed by 47.9% year-over-year to 2.44 million units in January. China&#39;s foreign exchange reserves fell to $3.219 trillion in January from $3.238 trillion in the prior month. Foreign exchange reserves in Hong Kong fell to $423.2 billion in January.
The index of leading economic indicators in Japan rose to 110.0 in December versus a revised reading of 108.1 in the previous month, while index of coincident economic indicators rose to 116.2 in December from a final reading of 114.6. Reserve assets in Japan declined to $1.292 trillion in January from $1.295 trillion a month ago.
&nbsp;
<h3>Economics</h3>
&nbsp;
U.S. mortgage applications increased by 3.7% on the week ending Feb. 2.
The trade deficit in the U.S. came in at $62.2 billion in December versus a revised $61.9 billion gap in November.
Crude oil inventories in the U.S. increased by 5.521 million barrels in the week ending Feb. 2, , the most since mid-November.
Now Read This: <a href="https://www.benzinga.com/news/24/02/36977073/wall-streets-most-accurate-analysts-hold-sell-these-3-tech-and-telecom-stocks-with-over-3-dividend-y"> Wall Street&#39;s Most Accurate Analysts&#39; Views On 3 Tech And Telecom Stocks With Over 3% Dividend Yields </a>

Earnings

Penny Stocks

Eurozone

Commodities

Small Cap

Global

Intraday Update

Markets

AVNW

MicroCloud Hologram Inc. - Ordinary Shares

HOLO

SNAP

Nasdaq Surges Over 100 Points; Yum! Brands Posts Downbeat Results

Bernstein analyst Danilo Gargiulo maintained a Buy rating on Yum! Brands (YUM – Research Report) today and set a price target of $144.00. The compa...

Bernstein Reaffirms Their Buy Rating on Yum! Brands (YUM)

Companies in the Consumer Cyclical sector have received a lot of coverage today as analysts weigh in on Expedia (EXPE – Research Report), Ford Moto...

Analysts Offer Insights on Consumer Cyclical Companies: Expedia (EXPE), Ford Motor (F) and Yum! Brands (YUM)

Analysts have been eager to weigh in on the Consumer Cyclical sector with new ratings on Ford Motor (F – Research Report), Yum! Brands (YUM – Resea...

Analysts Have Conflicting Sentiments on These Consumer Cyclical Companies: Ford Motor (F), Yum! Brands (YUM) and Hermes International (OtherHESAF)

Yum! Brands dips after Argus turned cautious on the near-term earnings outlook

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
Several different food-related exchange traded funds (ETFs) are available that dabble in <a href="https://investorplace.com/industries/consumer-discretionary/retail/restaurant/">restaurant stocks</a>.&nbsp;The largest is the Invesco Leisure and Entertainment ETF (NYSEARCA:<a href="https://investorplace.com/stock-quotes/pej-stock-quote/">PEJ</a>), with net assets of <a href="https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Institutional&amp;ticker=PEJ">$298 million</a>. However, only four out of its 31 holdings are pure-play restaurant stocks.&nbsp;



An industry-specific ETF to select for restaurant stocks would be the AdvisorShares Restaurant ETF (NYSEARCA:<a href="https://investorplace.com/stock-quotes/eatz-stock-quote/">EATZ</a>). With an appropriately designated stock symbol, EATZ is actively managed and is entirely made up of restaurant chains, except for a couple of food distributors. However, it has less than <a href="https://advisorshares.com/etfs/eatz/">$3 million</a> in net assets, so I wouldn&rsquo;t recommend you buy it.



PEJ and EATZ are up 10% and 6% year-to-date (YTD), with EATZ gaining more than 28% in the past six months, a sign restaurant stocks are on the mend. With this in mind, here are three restaurant stocks that analysts love right now.&nbsp;



<h2>Yum China Holdings (YUMC)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2020/07/yumc-stock-1-300x169.jpg" alt="A banner for Yum China (YUMC) decorates the New York Stock Exchange."><div>Source: rblfmr / Shutterstock.com</div></div>Yum China Holdings (NYSE:<a href="https://investorplace.com/stock-quotes/yumc-stock-quote/">YUMC</a>) is the largest of the three restaurant stocks on this list, with a market capitalization of $15.5 billion. Of the <a href="https://www.marketwatch.com/investing/stock/yumc/analystestimates">33 analysts</a> covering its stock, 22 rate it a &ldquo;buy,&rdquo; with a median target price of $55.07, 43% higher than where it&rsquo;s currently trading.



YUMC is China&rsquo;s operator of KFC and Pizza Hut. But unfortunately, the Chinese population hasn&rsquo;t been dining out as often due to higher inflation in 2023 and a sputtering domestic economy. This has severely reduced Yum China&rsquo;s same-store sales growth.&nbsp;



As a result, YUMC shares are down nearly 40% over the past year. YUMC stock trades at one of the lowest points since Yum Brands (NYSE:<a href="https://investorplace.com/stock-quotes/yum-stock-quote/">YUM</a>) spun it off in <a href="https://www.forbes.com/sites/ywang/2016/11/01/yum-brands-spins-off-china-unit-in-new-york-amid-losses-in-market-share/?sh=59e099e74b97">November 2016</a>. As recently as March 2023, it traded well over $60.&nbsp;



The company reported strong <a href="https://yumchinaholdingsinc.gcs-web.com/static-files/4a653df7-310b-4190-97c2-384b0189032d">2023 results</a> in February, including a 21% increase in system-wide sales, 7% same-store sales growth, opening nearly 1,700 new stores and an operating profit of $1.1 billion, 79% higher than a year earlier.&nbsp;&nbsp;



Due to the strong year, it plans to buy back $1.25 billion of its stock in 2024 and increase its quarterly dividend to 16 cents. It also plans to open up to 1,700 stores this year to reach 20,000 by the end of 2026. It finished 2023 with 14,644 in over 2,000 cities.&nbsp;



With a bright future ahead, YUMC is one of the restaurant stocks that has value right now.&nbsp;



<h2>Arcos Dorados (ARCO)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/07/mdc-1600-300x169.jpg" alt="McDonald's restaurant in Thailand."><div>Source: Tama2u / Shutterstock</div></div>Arcos Dorados (NYSE:<a href="https://investorplace.com/stock-quotes/arco-stock-quote/">ARCO</a>) is the second-largest of the three restaurant stocks, with a market cap of $2.4 billion. All <a href="https://www.marketwatch.com/investing/stock/arco/analystestimates">six analysts</a> covering its stock rate it a &ldquo;buy,&rdquo; with a median target price of $14.30, 27% higher than where it&rsquo;s currently trading.&nbsp;



Just as Yum China focuses on KFC and Pizza Hut restaurants in China, Arcos focuses on McDonald&rsquo;s (NYSE:<a href="https://investorplace.com/stock-quotes/mcd-stock-quote/">MCD</a>) restaurants in Latin America and the Caribbean.&nbsp;



It is the region&rsquo;s largest restaurant chain, with <a href="https://www.businesswire.com/news/home/20240313225693/en/Arcos-Dorados-Reports-Strong-Fourth-Quarter-and-Full-Year-2023-Financial-Results">2,361 locations</a> as of Dec. 31, 2023. The company owns 71% of them, and the rest are franchised. Approximately 48% of its locations are in Brazil, with the remainder split between northern and southern Latin America.&nbsp;&nbsp;



In 2023, it had $4.33 billion in revenue, up 19.6% from 2022. Its net income was $181.3 million, 29.2% higher than a year earlier.&nbsp;It trades at a reasonable 13x its 2023 earnings of 86 cents. McDonald&rsquo;s trades at <a href="https://www.morningstar.com/stocks/xnys/mcd/valuation">23.3x </a>earnings, almost double.



I <a href="https://investorplace.com/2023/01/the-3-best-south-american-stocks-to-buy-in-2023/">recommended</a> ARCO stock in January 2023 at $8.70 a share. It&rsquo;s up 29% since. It&rsquo;s still a buy in double digits.&nbsp;



<h2>Portillo&rsquo;s (PTLO)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2021/10/ptlo-stock-1-300x169.jpg" alt="The front of a Portillo's (PTLO) hotdog restaurant in Riverside, California."><div>Source: TonelsonProductions / Shutterstock.com</div></div>Portillo&rsquo;s (NASDAQ:<a href="https://investorplace.com/stock-quotes/ptlo-stock-quote/">PTLO</a>) is the smallest of the three restaurant stocks, with a market capital of $967 million. Seven of the <a href="https://www.marketwatch.com/investing/stock/ptlo/analystestimates">10 analysts</a> covering its stock rate it a &ldquo;buy,&rdquo; with a median target price of $21.11, 59% higher than where it&rsquo;s currently trading.&nbsp;



All three of the restaurant stocks on this list are down in 2024, with Portillo&rsquo;s doing the worst, down by 15%. The operator of fast-casual restaurants serving Chicago-style food went public in October 2021 at <a href="https://investors.portillos.com/news-releases/news-release-details/portillos-inc-announces-pricing-initial-public-offering">$20 a share</a>. Its shares currently trade 34% below its initial public offering (IPO) pricing.&nbsp;



When it went public, it had 67 locations in nine states. Today, <a href="https://investors.portillos.com/news-releases/news-release-details/portillos-inc-announces-fourth-quarter-and-fiscal-year-2023">84</a> are open in 10 states, up from 72 at the end of 2022. In 2023, it opened locations in Arizona, Florida, Illinois and Texas. In 2024, it plans to open at least nine locations.



For its business in 2024, Portillo&rsquo;s expects 12-15% restaurant unit growth, same-store sales growth in the low single digits revenue growth in the mid-teens and adjusted EBITDA growth in the low teens.



In late March, Jefferies analysts <a href="https://www.investing.com/news/company-news/portillos-stock-pt-cut-but-jefferies-maintains-buy-on-solid-fundamentals-93CH-3356826">cut</a> Portillo&rsquo;s price target by $3 to $21. However, it maintained its &ldquo;buy&rdquo; rating on the stock, suggesting that the company will continue to be successful with its expansion plans outside the Chicago area. Skeptics have overstated concerns about the restaurant operator&rsquo;s financials and business, but I think it&rsquo;s another value buy.



On the date of publication, Will Ashworth did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com <a href="https://investorplace.com/corporate/investorplace-publishing-guidelines/">Publishing Guidelines</a>.
<div>Will Ashworth has written about investments full-time since 2008. Publications where he&rsquo;s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.</div><h3>More From InvestorPlace</h3>
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The post <a href="https://investorplace.com/2024/04/wall-street-favorites-3-restaurant-stocks-with-strong-buy-ratings-for-april-2024/">Wall Street Favorites: 3 Restaurant Stocks With Strong Buy Ratings for April 2024</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

Wall Street Favorites: 3 Restaurant Stocks With Strong Buy Ratings for April 2024

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