Yum! Brands operates quick service restaurants. It operates in five segments: YUM China, YUM India, the KFC Division, the Pizza Hut Division, and the Taco Bell Division. The company was founded in 1997 and is based in Louisville, Kentucky.
YUM Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Yum Brands Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Yum Brands Inc ranked in the 27th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for YUM, they are:
The company has produced more trailing twelve month cash flow than 87.47% of its sector Consumer Cyclical.
Yum Brands Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 15.55% of tickers in our DCF set.
Yum Brands Inc's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than merely 24.06% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
FWONA, PLOW, ROL, SGA, and ATR can be thought of as valuation peers to YUM, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Shares of Beyond Meat spiked 13.7% on Thursday after the producer of plant-based meat substitutes teamed up with Yum Brands’ (YUM) subsidiary Taco Bell to create plant-based protein. Taco Bell's partnership with Beyond Meat (BYND) marks its foray into plant-based meat in the US. Notably, Taco Bell has already been offering vegetarian options on its menu and has announced that it is bringing back the potato products. Meanwhile, earlier this week, Beyond Meat announced that it will be partnering with some popular local restaurants in nine US cities to offer plant-based Beyond Breakfast Sausage for free as a breakfast promotion. (See BYND stock analysis on TipRanks). On Dec.