On Friday, Evercore ISI reaffirmed its In Line rating and a $145.00 price target for Yum! Brands (NYSE:YUM). The firm's analysts highlighted Taco Bell as a key driver for the company's growth, noting its strong performance in the fourth quarter and potential for continued success in 2025.
The analysts expect Taco Bell's sales to be bolstered by new menu items such as Steak Garlic Nacho Fries and Baja Dream Freezes, set to launch on January 16th.
The firm also adjusted its fourth-quarter same-store sales (SSS) growth estimate for Taco Bell from 4% to 5%, exceeding the consensus of 4%. This upgrade comes after Taco Bell's robust year-end performance, which was aided by the introduction of chicken nuggets.
The analysts believe that this momentum will carry into 2025, with mid-single-digit growth rates for Taco Bell.
Furthermore, Evercore ISI suggested that the market might be underestimating the upcoming first-quarter sales for Pizza Hut. While the consensus is flat growth, the analysts foresee potential upside to their estimates.
The positive outlook for Yum! Brands is underpinned by strategic menu innovations and anticipated sales growth in the near term. The firm's analysis points to a tactical trading opportunity for investors, banking on the strength of Taco Bell and a possible rebound for Pizza Hut in the upcoming quarter.
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