Yum! Brands' (YUM) solid underlying growth trajectory remains intact, with Taco Bell and KFC well positioned for additional gains, UBS Securities said.
For Q4 2025, the brokerage expects continued momentum at Taco Bell and KFC, with same-store sales projected at roughly 6% for Taco Bell, 2% for KFC global, and -2% for Pizza Hut globally. Core operating income growth is expected to fall slightly below the long-term 8% algorithm, partly due to incremental Pizza Hut marketing investment.
UBS said in a Sunday note that 2026 guidance is expected to target 8% operating profit growth and underlying unit growth in line with the 5% long-term algorithm.
Taco Bell is expected to maintain strong sales momentum in 2026, with modeled same-store sales of 3.8%. KFC would continue to see solid comparable-store growth and elevated store expansion, according to the note.
The investment firm noted that the ongoing strategic review of the brand could create a faster growth trajectory for the remaining portfolio but highlighted that Pizza Hut US challenges are likely to weigh on overall results.
The brokerage also highlighted Yum!'s Byte by Yum! technology platform as a key support for multiyear unit expansion and long-term earnings growth.
UBS maintained a buy rating on YUM with a $180 price target.
The company is expected to report its Q4 results Wednesday.
Shares of Yum! Brands were up nearly 1% in recent Monday trading.
Price: 156.85, Change: +1.35, Percent Change: +0.87
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