Argus downgraded Yum! Brands to Hold from Buy, with analyst John Staszak warning the restaurant operator may struggle to hit its long-term growth targets. Staszak said Yum's long-term algorithm of 5% annual unit growth, 7% system sales growth and at least 8% core operating profit growth looks increasingly difficult to achieve over the next several quarters, citing food-safety issues at Taco Bell, promotional efforts and low-single-digit comparable sales growth at KFC. He cut his fiscal 2026 EPS estimate to $6.40 from $7, implying roughly 6% growth and sitting close to the $6.39 consensus, and reduced his preliminary 2027 adjusted EPS forecast to $7.00 from $7.80. Yum's second-quarter operating margin fell to 30.7% from 32.2% a year earlier as company restaurant expenses increased. A potential offset is the planned sale of U.S. Pizza Hut restaurants this quarter, which could remove a drag on results and let management focus more heavily on KFC and Taco Bell.
Yum! Brands IncArgus downgraded Yum! Brands to Hold from Buy and cut its FY2026 and FY2027 EPS estimates on difficulty hitting long-term growth targets.
Yum China Holdings Inc