Yum! Brands Inc. (NYSE: YUM) is scheduled to release its second-quarter financial results Tuesday after the markets close. The consensus estimates from Thomson Reuters call for $0.63 in earnings per share (EPS) on revenue of $3.19 billion. In the same period of last year, it posted $0.73 in EPS on $3.20 billion in revenue.
The Taco Bell segment of Yum has begun home delivery in a number of metro areas. The fast-food business becomes more competitive by the day as chains alter their menus and store hours.
According to Taco Bell management:
Taco Bell delivery is rolling out to select markets through a partnership with on-demand delivery service DoorDash. The delivery service will be available in over 90 cities and more than 200 restaurants throughout the Los Angeles, Orange County, San Francisco Bay Area and Dallas regions. The partnership provides delivery service beginning today through the DoorDash iOS, Android or website. Pricing and delivery costs may vary depending on restaurant location.
Credit Suisse’s Jason West has taken a Neutral stance on the restaurant segment, but he did not pick Yum as one of the winners he sees playing out in the second half of 2015.
Most notably, the heightened risk of a catalyst event prompted a rise in Yum’s price target to $85 from $77, but still with an Underperform rating. However, Credit Suisse’s base case still is that the company will continue to prioritize a fundamental recovery in China over a business separation or leverage event.
Other analysts weighed in separately on Yum before its earnings were released:
- RBC Capital reiterated a Top Pick rating and increased the price target to $103 from $93.
- Oppenheimer reiterated an Outperform rating with a $105 price target.
- Deutsche Bank initiated coverage with a Hold rating and a $90 price target.
Shares of Yum were up 0.5% at $91.65 Tuesday morning. The stock has a consensus analyst price target of $93.47 and a 52-week trading range of $65.81 to $95.90.
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