Yum! Brands hit on the notes Citi hoped for at its investor day

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Yum! Brands (NYSE:YUM) held an Investor Day event on Tuesday, with BTIG and Morgan Stanley analysts Neutral on the event and Citi providing a more positive tone.

Morgan Stanley analysts told investors YUM’s Investor Day laid out new financial targets slightly ahead of prior ones. However, Morgan Stanley feels they are “well within investor expectations,” and they don’t compel the firm to modify its forecasts through ’25.

“What the event did reinforce, in our view, was confidence in the key drivers of unit growth, which was topped up here, across brands and markets, and how scale and strategic investment in technology (more details below) is an increasingly important unlock for sales as well as franchisee profitability,” added the analysts, who maintained an Overweight rating and $140 price target on the stock.

BTIG maintained the firm’s Neutral rating on the stock, stating, “Yum! Brands’ long-anticipated Investor Day on Tuesday proved to be a worthwhile check-in on the company’s strategy and brands, but lacked any major developments.”

“Key topics of discussion included global development, technology, digital sales, KFC unit growth and Taco Bell’s sales opportunity. The significant financial takeaway was a slight raise in the company’s long-term growth algorithm, though the event actually proved to be light on a lot of the customary financial details. We remain impressed by the company’s global unit and sales momentum, but didn’t get the sense that pockets of weakness like Pizza Hut U.S. have any immediate solutions and remain Neutral given a fairly balanced outlook,” wrote BTIG.

Finally, Citi analysts maintained a Buy rating and $160 price target on Yum! The analyst said Yum! “hit on the notes we were hoping for at the investor event, namely the company drew a much more direct line from digital capabilities to franchisee economics, sales opportunities, store location analytics and therefore unit growth – the LT engine of shareholder value creation.”

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