2023-07-10 12:51:47 ET
Yum! Brands, Inc. ( NYSE: YUM ) rose 1.4% mid-day Monday as UBS said it's set for further outperformance thanks to Taco Bell.
The company reported same-store sales of 8% for the first quarter, and the bank anticipates "outsized sales & earnings contribution will continue given: the brand's strong value proposition, ongoing digital gains (24% mix in '22) and menu innovation, incl. the return of the Volcano Menu (6/27; partnering w/ Paris Hilton) and upcoming return of the Beefy Crunch Burrito (early Aug)."
Investor sentiment on YUM has become negative because of softer year-on-year Taco Bell sales, concerns about China and a lack of upside to consensus earnings estimates for 2023, UBS analysts led by Dennis Geiger wrote in a note. "We think less favorable investor positioning can create an opportunity for shares over time."
EPS estimates have been revised to the upside 11 times over the past 90 days, versus eight downward revisions.
More on fast food companies:
- Darden Restaurants falls after same-restaurant sales trail estimates
- Restaurant Brands International takes Firehouse Subs chain global
- Taco Bell is called Yum! Brands' crown jewel for good economic times and bad
- Restaurant stocks could get jolted by an upcoming Supreme Court ruling
- McDonald's: Still A Buy
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Yum! gains as UBS says more to come with Taco Bello-Paris Hilton partnership, return of Beefy Crunch Burrito