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JPMorgan sees a rosy outlook ahead for Yum Brands . The bank upgraded shares of the Taco Bell, KFC and Pizza Hut owner to an overweight investment rating from neutral, but analyst John Ivankoe lowered his 12-month price target to $162 per share from $170. This revised forecast is still approximately 14% higher than where shares closed Tuesday. Yum has added more than 6% this year, outperforming a gain of less than 4% for the S & P 500. YUM YTD mountain YUM YTD chart Ivankoe cited several catalysts for the stock, including strong free cash flow generation, a lower valuation and sustained unit growth of 4% or above. The stock “is close to levels first hit in late 2021 and deserves a revisit in our opinion,” the analyst wrote. Ivankoe said that newly-appointed Yum CEO Chris Turner, who takes over in October, is likely to continue focusing on technology in order to drive franchisee returns. Outside the U.S., sales remain strong at Yum’s international locations. “Within the 4.2% global unit growth, China represents a still very high 8.8% annual growth as implied by [Yum China] while Pizza Hut ex-China is down 1% and KFC intl ex-China is up 4.5%,” JPMorgan said. “We expect the high returning Taco Bell to grow 4% globally with 3% from the U.S.”
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