任意の製品分析
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The biggest upside opportunity lies in accelerating international unit expansion across KFC Global, where 88% of system sales are generated outside the United States and secular consumer demand favors chicken as the fastest-growing global protein category.
We affirm a Hold rating on Yum! Brands Inc. with an intrinsic Fair value of USD 133.09 per share, compared to a market price of USD 136.12 as of October 2, 2026. This implies a return of -2.23%, representing a 2.28% market price premium over intrinsic value. Yum! Brands commands a wide economic moat supported by massive international scale across KFC Global and an expanding digital platform at Taco Bell, producing resilient consolidated operating margins of 31.34%. However, current market pricing leaves insufficient margin of safety given a substantial debt burden of $11,910M with intermediate-term maturities facing elevated interest rates, elevated digital reinvestment , and consensus FY2027 top-line contraction of -1.09%.
Yum! Brands operates one of the world's largest quick-service restaurant systems, spanning over 140 countries through an asset-light, 98%+ franchised model. In FY2025, consolidated revenue totaled $8,214M, aligned with total divisional revenue of $8,220M. The core earnings engine remains KFC Global, which generated $3,542M in revenue (43.1% of consolidated revenue), with 88% of system sales derived outside the United States and supported by global category tailwinds in chicken. Taco Bell Global represents the primary domestic profit anchor, contributing $3,095M in FY2025 revenue and leading digital execution with a 47% digital sales mix. Because corporate revenues are anchored in contractual top-line franchise royalties and fees, Yum! Brands generated consolidated operating income of $2,574M in FY2025 (a 31.34% operating margin) and GAAP net income of $1,559M, insulating corporate profits from store-level labor and food commodity inflation relative to company-operated restaurant peers like Chipotle (16.11% operating margin).3567
Despite structural business model advantages, our balanced assessment highlights material headwinds that constrain risk-adjusted upside. Yum! Brands carried $11,910M in total debt as of FY2025 ($13,414M as of October 2026), with over $3.68B in principal maturities scheduled over the next three years. Refinancing this maturity wall against a 5.24% risk-free rate and a pre-tax cost of debt of 6.24% will increase annual interest burdens above the $500M paid in FY2025, elevating the cost of capital and diluting net earnings. Concurrently, competitive pressure in quick service has intensified, with peers like McDonald's (46.49% operating margin) executing aggressive meal bundle promotions. In Q2 2026, Taco Bell experienced a temporary negative 2% same-store sales trend through late July. Moreover, consensus expectations project FY2027 revenue contracting by -1.09% to $8,632M, reflecting refranchising transitions and international discretionary spending softness in markets such as the United Kingdom ($1,021M FY2025 revenue).12457
Our house valuation yields a composite Fair value of USD 133.09 per share, derived from four disciplined valuation models. Forward Earnings serves as the primary anchor (35% weight, $117.09 midpoint), capitalizing FY2027 consensus EPS of $6.93 at a 19.0x terminal multiple, reflecting stable franchise earnings power alongside near-term refranchising effects. Multi-Stage Moat Fade (30% weight, $162.08 midpoint) accounts for the durable competitive advantage and high returns on invested capital across KFC Global and Taco Bell. Owner Earnings (20% weight, $104.80 midpoint) reflects cash conversion discipline after accounting for maintenance capital expenditures, noting that FY2025 capex stepped up to $371M (1.80x depreciation of $206M) for digital kiosk and store automation rollouts. Finally, FCFF DCF (15% weight, $150.18 midpoint) discounts projected cash flows at a WACC of 7.21% and explicitly incorporates net debt obligations. Our intrinsic Fair value of USD 133.09 sits 16.7% below the present-value equivalent of the sell-side analyst consensus 12-month target (USD 159.85 present value, discounted from USD 172.65 at an 8.01% cost of equity), as external targets assume faster multiple expansion without fully incorporating debt refinancing headwinds.12456
In conclusion, the committee affirms a Hold rating on Yum! Brands Inc.. At USD 136.12, the market price already reflects the company's high-quality franchised cash flow profile while leaving no buffer for operational or interest rate shocks. Management's capital allocation plan to utilize anticipated net proceeds of $2.3B from Pizza Hut transactions to reduce revolving debt and support share repurchases provides balance-sheet flexibility following $670M in first-half 2026 share buybacks. Existing investors should maintain their current holdings, while prospective buyers should wait for a more compelling margin of safety or tangible proof of successful maturity refinancing and same-store sales acceleration.45
Yum! Brands commands a global scale advantage across 140+ countries, with KFC Global generating $3,542M in FY2025 revenue (43.1% of consolidated revenue). With 88% of KFC system sales generated outside the US and secular category tailwinds where chicken is the fastest-growing global protein, the international franchise footprint compounds long-term unit growth with minimal parent capital intensity.57
The 98%+ franchised operating model generates top-line royalty revenues insulated from store-level labor and food commodity inflation, producing a consolidated operating margin of 31.34% and $2,574M in operating income in FY2025. This structural profitability enables consistent cash conversion to support shareholder returns and debt service, far outpacing company-operated restaurant peers like Chipotle (16.11% operating margin).36
Proprietary digital channels continue to expand, with Taco Bell achieving an industry-leading 47% digital mix in Q2 2026 supported by loyalty drops and kiosk integration. As the platform rollout completes, capital expenditures are projected to moderate toward historical baseline levels ($257M in FY2024 and $285M in FY2023) from the FY2025 peak of $371M, expanding recurring free cash flow.56
The committee maintains a Hold rating on Yum! Brands Inc. with an intrinsic Fair value of USD 133.09 per share against a market price of USD 136.12 as of October 2, 2026. While Yum! Brands' 98%+ franchised model delivers exceptional 31.34% operating margins and durable international growth via KFC Global ($3,542M FY25 revenue), the stock trades at an implied return of -2.23% (a 2.28% price premium). Elevated total debt of $11,910M with intermediate refinancing obligations against higher borrowing rates (pre-tax debt cost 6.24%, risk-free rate 5.24%), alongside consensus FY2027 revenue contraction of -1.09%, creates a balanced risk/reward profile with no margin of safety for fresh capital deployment.12467
Yum! Brands Inc. is a leading global quick-service restaurant franchisor operating across more than 140 countries and territories with an asset-light operating model where over 98% of system restaurants are franchisee-owned. The company conducts operations through four principal reporting divisions: KFC Global, Taco Bell Global, Pizza Hut Global, and The Habit Burger Grill. In FY2025, consolidated revenues totaled $8,214M, generating $2,574M in consolidated operating income and $1,559M in GAAP net income.
By operating division, KFC Global functions as the primary international scale powerhouse, generating $3,542M in FY2025 revenue (43.1% of consolidated revenue), with 88% of KFC system sales generated outside the United States. Taco Bell Global represents the dominant domestic Mexican-style QSR concept, contributing $3,095M in FY2025 revenue and leading digital deployment with a 47% digital sales mix in Q2 2026. Pizza Hut Global generated $1,013M in FY2025 revenue, while The Habit Burger Grill delivered $570M. Total divisional revenues across all concepts reached $8,220M. Geographically, the United States accounted for $4,525M of FY2025 revenue, and the United Kingdom contributed $1,021M.
In a compound downside stress scenario, simultaneous headwinds across competitive value meal discounting, elevated debt refinancing costs, and ongoing technology capital commitments severely impair equity value. If quick-service competitors intensify price wars, franchisee store-level margins contract, forcing corporate royalty relief that drives operating margins down 300 bps below the 28.5% threshold. Concurrently, refinancing $3.68B in maturing debt against a 5.24% risk-free rate and 6.24% cost of debt increases annual interest expense, causing debt coverage metrics to deteriorate and driving the cost of equity up by 200 bps to 10.01%. Under these conditions, consensus FY2027 top-line contraction (-1.09% revenue growth) becomes structural rather than transitional, prompting the terminal forward P/E multiple to contract from 20.45x down to 16.78x parity with McDonald's. Under this joint stress test, intrinsic valuation falls toward the low end of the fair value range ($103.37).
FY2025 operating income was $2,574M on $8,214M revenue (31.34% margin). During Q2 2026, Taco Bell experienced temporary negative 2% same-store sales. Aggressive promotional value bundling from fast-food peers like McDonald's (46.49% operating margin) could compress franchisee margins, forcing corporate royalty relief or marketing concessions that reduce consolidated operating margin below 28.5% (-300 bps shock), impacting fair value by -18.5%.56
投資判断を弱める5つの変化です。
Franchisee unit profitability compression forcing corporate royalty abatements or marketing fee relief under aggressive quick-service promotional discounting.
現在:31.34% operating margin in FY2025
警戒条件Operating margin falling below 28.50%
Yum! Brands possesses a wide economic moat rooted in its massive global franchise ecosystem, dominant brand intangibles, and structural procurement scale. Anchored by KFC Global ($3,542M FY2025 revenue) and Taco Bell Global ($3,095M FY2025 revenue), Yum! operates across 140+ countries. This vast geographic and concept diversification shelters corporate earnings from localized downturns, as shown by stable consolidated revenues of $8,214M in FY2025 and divisional revenues of $8,220M.
The structural core of the moat is Yum's asset-light franchise model, which exceeds 98% system franchised. Unlike company-operated restaurant peers such as Chipotle (CMG, operating margin 16.11%) that directly absorb store-level wage inflation and raw food cost swings, Yum! collects contractual top-line royalties. This enables Yum! to sustain an operating margin of 31.34% ($2,574M operating income in FY2025) and GAAP net income of $1,559M. Franchisees commit the upfront capital expenditures for store openings and technology installations, protecting corporate capital efficiency.
Yum's platform breadth is enhanced by digital integration and loyalty infrastructure. Taco Bell achieved a 47% digital sales mix in Q2 2026, utilizing mobile Tuesday drops, kiosks, and drive-through customer recognition to drive order frequency and higher check sizes. However, because major peers like McDonald's (46.49% operating margin) and Chipotle (23.60x forward P/E) are also deploying advanced digital ordering systems, digital infrastructure acts as a vital competitive necessity to defend market share rather than an uncontested monopoly.
The durability of Yum's competitive advantage is evidenced by its extraordinary economic profit spread. The company generated an ROIC of 47.15%, exceeding its WACC of 7.2125% by ~3,994 basis points. While elevated corporate debt ($11,910M in FY2025) and near-term technology reinvestment require ongoing capital discipline, the contractual nature of global royalties ensures high margin durability over a multi-decade horizon.
Yum! Brands produces outstanding economic profitability, generating an ROIC of 47.15% compared against a weighted average cost of capital of 7.2125% and cost of equity of 8.0121%. This creates an excess economic spread of ~3,994 basis points. Because over 98% of the restaurant footprint is operated by independent franchisees, invested capital on the corporate balance sheet remains low while the parent company collects high-margin royalties on top-line system-wide sales.2
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
The highlighted cell is Fair value when every assumption sits at its base level ($133.09). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $2.0B after modeled reinvestment of $176.2M, with terminal value at 82.8% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
The Base scenario represents the modal expected trajectory. Near-term revenue reflects consensus recovery in FY2026 followed by modest top-line contraction in FY2027 due to refranchising and segment adjustments, before settling into sustainable annual system sales expansion. Operating margin remains steady, insulated by contractual franchise royalties. Diluted earnings per share compound steadily across FY2026 and FY2027, supported by recurring cash flow and disciplined share repurchases. Capital expenditures moderate toward maintenance levels, supporting our Base target of $133.09.156
A decisive earnings beat confirms that Taco Bell's negative 2% same-store sales dip in Q2 2026 was transient, while digital loyalty drops and kiosk adoption are expanding operating margins. Combined with re-accelerating international KFC system sales, top-line visibility would validate an upgrade to Buy.
Results matching consensus validate the house valuation of $133.09 relative to the $136.12 market price. Refranchising drag in FY2027 (-1.09% revenue growth) and stable operating margins keep intrinsic value fully aligned with a Hold recommendation.
An earnings miss indicates that competitive discounting from fast-food peers like McDonald's (46.49% operating margin) is eroding franchisee economics, or that negative same-store sales are persisting.
Yum! Brands exhibits strong earnings quality characterized by an asset-light, royalty-driven financial profile. GAAP net income reached $1,559M in FY2025 supported by operating cash flow of $2,010M, yielding a cash conversion ratio well over 100%. Operating income of $2,574M on $8,214M revenue (31.34% operating margin) reflects clean top-line royalties with no material aggressive accruals. Stock-based compensation of $70M represents less than 4.5% of net income, which is more than offset by share repurchases ($552M in FY2025 and $670M in 1H 2026).5
Yum! Brands' cash flow generation reflects the structural power of its franchised business model. In FY2025, the company generated $2,010M in operating cash flow from $1,559M in GAAP net income. Deducting estimated maintenance capital expenditures of $259.7M (70% of total $371M capex) yields normalized owner earnings of $1,505.3M ($5.52 per share) across 272.9M shares. Free cash flow to the firm (FCFF) is projected at $2,025.9M in FY2026 on NOPAT of $2,202.0M, reflecting an 8.0% reinvestment rate ($176.2M net capital reinvestment). As digital kiosk deployments mature, reinvestment will moderate to 5.0% of NOPAT by FY2030, lifting FCFF to $2,433.3M and sustaining high equity .
Yum! Brands achieves an exceptional return on invested capital of 47.15% due to its asset-light franchised model, where franchisees finance store development and equipment while the corporate entity generates high-margin royalties. Invested capital remains minimal relative to operating profits ($2,574M operating income in FY2025), ensuring stable, high-tier capital efficiency.
Yum's ROIC of 47.15% vastly exceeds its WACC of 7.2125% and cost of equity of 8.0121%, generating an extraordinary economic profit spread of ~3,994 basis points.
Operating income was $2,574M on $8,214M in FY2025 (31.34% ), and reached $1,559M. Company-operated peer Chipotle delivers an operating margin of 16.11%.
| 売上高 | $8,214,000,000 |
|---|---|
| 売上原価 | $4,422,000,000 |
| 売上総利益 | $3,792,000,000 |
| 営業費用 | $1,218,000,000 |
| 営業利益 | $2,574,000,000 |
| 営業外項目および税金 | -$1,015,000,000 |
| 純利益 | $1,559,000,000 |
| 総資産 | $8,197,000,000 |
|---|---|
| 現金 | $709,000,000 |
| 流動資産 | $2,040,000,000 |
| 負債合計 | $15,521,000,000 |
| 流動負債 | $1,516,000,000 |
| 株主資本欠損 | $7,325,000,000 |
| 純利益 | $1,559,000,000 |
|---|---|
| 営業キャッシュ流入 | $2,010,000,000 |
| 減価償却費 | $206,000,000 |
| 株式報酬 | $70,000,000 |
| その他の営業調整 | $175,000,000 |
| 営業キャッシュフロー | $2,010,000,000 |
| 利用可能現金 | $2,849,000,000 |
| 期首現金 | $807,000,000 |
| 為替レートの影響 | $32,000,000 |
| 投資キャッシュ流出 | $1,003,000,000 |
| 設備投資 | $371,000,000 |
| その他の投資活動 | $632,000,000 |
| 財務キャッシュ流出 | $924,000,000 |
| 純有利子負債調達 | $480,000,000 |
| 自社株買い | $552,000,000 |
| 支払配当金 | $789,000,000 |
| その他の財務活動 | $63,000,000 |
| 期末現金 | $923,000,000 |
| 投資キャッシュフロー | -$1,003,000,000 |
| 財務キャッシュフロー | -$924,000,000 |
2026-10-03の分析で使用した時点財務データ。
| 期間 | 売上高 | EBITDA | 純利益 | 営業キャッシュフロー | フリーキャッシュフロー | 設備投資 | 減価償却費 | 株式報酬 | 自社株買い | 支払配当金 | 純有利子負債調達 | 投資キャッシュフロー | 財務キャッシュフロー | 期首現金 | 期末現金 | 現金および投資 | 総負債 | 営業利益率 | ROIC | WACC | ROIC−WACCスプレッド |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | $63.6億 | $19.6億 | $16.4億 | $12.5億 | $8.3億 | $4.2億 | $3.1億 | $8000万 | — | $7.4億 | — | -$400万 | -$7.4億 | — | $8.3億 | $8.9億 | $91.3億 | 26.5% | — | 5.2% | — |
| 2017-12-31 | $58.8億 | $29.7億 | $13.4億 | $10.3億 | $7.1億 | $3.2億 | $2.5億 | $6500万 | $19.6億 | $4.2億 | — | $14.7億 | -$18億 | $8.3億 | $16.7億 | $15.3億 | $98億 | 47.0% | — | 4.9% | — |
| 2018-12-31 | $56.9億 | $24.3億 | $15.4億 | $11.8億 | $9.4億 | $2.3億 | $1.4億 | $5000万 | $23.9億 | $4.6億 | — | $3.1億 | -$26.2億 | $16.7億 | $4.7億 | $3.1億 | $100.7億 | 40.4% | — | 5.4% | — |
| 2019-12-31 | $56億 | $19.7億 | $12.9億 | $13.2億 | $11.2億 | $2億 | $1.1億 | $5900万 | $8.2億 | $5.1億 | — | -$8800万 | -$9.4億 | $4.7億 | $7.7億 | $6.1億 | $112.7億 | 34.5% | — | 4.2% | — |
| 2020-12-31 | $56.5億 | $17.1億 | $9億 | $13.1億 | $11.5億 | $1.6億 | $1.5億 | $9700万 | $2.4億 | $5.7億 | — | -$3.4億 | -$7.4億 | $7.7億 | $10.2億 | $7.3億 | $116.5億 | 26.6% | — | 4.6% | — |
| 2021-12-31 | $65.8億 | $23.8億 | $15.8億 | $17.1億 | $14.8億 | $2.3億 | $1.6億 | $7500万 | $15.9億 | $5.9億 | — | -$1.7億 | -$17.7億 | $10.2億 | $7.7億 | $4.9億 | $121.3億 | 32.5% | — | 5.2% | — |
| 2022-12-31 | $68.4億 | $23.4億 | $13.3億 | $14.3億 | $11.5億 | $2.8億 | $1.5億 | $8400万 | $12億 | $6.5億 | $5.8億 | -$2億 | -$13.2億 | $7.7億 | $6.5億 | $3.9億 | $126.6億 | 32.0% | — | 7.1% | — |
| 2023-12-31 | $70.8億 | $24.8億 | $16億 | $16億 | $13.2億 | $2.9億 | $1.5億 | $9500万 | $5000万 | $6.8億 | -$6.8億 | -$1.1億 | -$14.3億 | $6.5億 | $7.2億 | $5.1億 | $120.3億 | 32.8% | — | 7.2% | — |
| 2024-12-31 | $75.5億 | $25.6億 | $14.9億 | $16.9億 | $14.3億 | $2.6億 | $1.8億 | $6900万 | $4.4億 | $7.5億 | $1億 | -$4.2億 | -$11.6億 | $7.2億 | $8.1億 | $7.1億 | $122.9億 | 31.8% | — | 7.8% | — |
| 2025-12-31 | $82.1億 | $27.8億 | $15.6億 | $20.1億 | $16.4億 | $3.7億 | $2.1億 | $7000万 | $5.5億 | $7.9億 | $4.8億 | -$10億 | -$9.2億 | $8.1億 | $9.2億 | $7.1億 | $119.1億 | 31.3% | — | 6.1% | — |
Yum! Brands Inc. (YUM) trades at 20.5x forward earnings against a peer median of 20.2x. Its EV/EBITDA of 16.3x compares with a peer median of 18.3x. The comparison uses 4 peers: Chipotle Mexican Grill Inc., McDonald's Corporation, eBay Inc. and Ross Stores Inc., as of 2026-10-03.
Yum! Brands' capital expenditures rose from $285M in FY2023 and $257M in FY2024 to $371M in FY2025 (1.80x D&A of $206M), representing 4.52% of revenue. In comparison, the restaurant industry capex-to-revenue benchmark is 3.70% (0.037) and the industry capex-to-depreciation benchmark is 1.64. Yum's elevated capex-to-revenue ratio reflects peak digital infrastructure and automated kiosk deployment.6
During an industry upcycle, strong consumer wage growth, steady foot traffic, and rapid digital adoption drive mid-single-digit same-store sales growth. Operating leverage flows through the franchise model as system-wide ticket size expands, motivating franchisees to accelerate new unit development. Capital investment in store automation, self-ordering kiosks, and mobile loyalty boosts store throughput and expands parent royalty receipts at minimal corporate capital outlay.
In an industry downcycle, consumer discretionary budgets tighten, causing lower-income diners to cut quick-service dining frequency or trade down aggressively toward grocery alternatives. Fast-food operators react by launching margin-dilutive price wars and promotional meal bundles. While top-line royalties buffer franchisors initially, prolonged franchisee margin squeeze leads to store closures, demands for corporate royalty relief, and a severe slowdown in net unit development.
Yum! Brands is strongly positioned within the global quick-service dining industry due to its asset-light franchised structure, core scale concepts (KFC and Taco Bell), and robust geographic footprint. While company-operated peers like Chipotle (CMG, operating margin 16.11%) face direct exposure to restaurant-level wage and food inflation, Yum's franchise model delivers a 31.34% operating margin, far exceeding the broader industry operating margin benchmark of 13.80%. Furthermore, Yum's digital integration (47% digital mix at Taco Bell) provides defensive customer engagement across economic fluctuations.356
With the market price at $136.12 trading at a 2.28% premium to our composite fair value midpoint of $133.09 (-2.23% implied return), existing positions should be maintained. Yum's wide economic moat and 47.15% ROIC provide strong long-term compounding, but near-term valuation parity, $11,910M in debt, and consensus FY2027 revenue contraction (-1.09%) justify a neutral market-weight sizing.14
Risk management centers on monitoring financial leverage and quick-service promotional intensity. Yum! carries $11,910M in debt with $3.68B maturing within 3 years. Investors should track management's deployment of expected $2.3B Pizza Hut net proceeds toward debt reduction to ensure debt-to-EBITDA remains below 4.5x. Concurrently, investors should monitor Taco Bell comps and UK consumer demand ($1,021M FY2025 revenue) to ensure franchisee health remains intact.
Yum! Brands possesses a wide economic moat with 47.15% ROIC and highly recurring contractual royalties across KFC Global ($3,542M FY25 revenue) and Taco Bell ($3,095M FY25 revenue). However, with the market price of USD 136.12 as of October 2, 2026 trading slightly above fair value USD 133.09 (-2.23% implied return), existing holders should maintain positions to let international expansion compound, while withholding incremental capital until valuation offers an attractive entry margin.47
From a tactical valuation perspective, YUM trades at 20.45x forward P/E, a premium to mature peer McDonald's at 16.78x, while facing consensus FY2027 top-line contraction of -1.09%. With $11,910M in debt and upcoming refinancing needs against a 5.24% risk-free rate, there is no valuation discount justifying fresh accumulation. Capital is best preserved on the sidelines until a wider margin of safety emerges.1234
YUM maintains consistent shareholder distributions supported by $1,559M in FY2025 GAAP net income and $670M in 1H 2026 share repurchases. The anticipated $2.3B Pizza Hut net proceeds will help reduce revolver balances and support ongoing buybacks. Income-focused investors should hold existing shares for stable capital returns but refrain from adding at market price levels of USD 136.12 as of October 2, 2026.456
We recommend a Hold rating on Yum! Brands Inc. with an intrinsic Fair value of USD 133.09 per share against the market price of USD 136.12 as of October 2, 2026. The shares trade at an implied return of -2.23% (a 2.28% market price premium), indicating that the market price fully discounts the company's high-margin franchise earnings power and wide economic moat without providing an adequate margin of safety.4
Existing shareholders should retain their core holdings given the durable compounding of KFC Global ($3,542M FY25 revenue), Taco Bell's leading digital mix (47%), and robust 31.34% operating margins. Prospective buyers should withhold fresh capital until a market pullback widens the discount to intrinsic value or until intermediate debt maturities ($3.68B over 3 years) are successfully refinanced without impairing equity cash flow.
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In the Bear scenario, aggressive value discounting from quick-service competitors compresses franchisee margins, forcing Yum! to grant royalty concessions and promotional support that compress operating margins. Weak consumer discretionary spending across the United Kingdom and international markets dampens KFC system sales growth, while refinancing maturing debt obligations in a sustained higher interest rate environment drives annual interest expense higher. Continuous technology software cycles keep capital expenditures elevated, suppressing cash conversion and dragging valuation toward downside levels.
Total debt is $11,910M as of FY2025 ($13,414M as of October 2026). With the risk-free rate at 5.24%, pre-tax cost of debt at 6.24%, and sector beta at 0.9241, refinancing over $3.68B in debt maturing over 3 years in a sustained high interest rate regime combined with financial leverage expansion triggers a 200 bps shock to the cost of equity (Ke exceeding 10.01%), producing a -22.0% fair value impact.24
Yum! Brands trades at 20.45x forward P/E, while direct peer McDonald's trades at 16.78x. If FY2027 revenue growth remains negative (-1.09% consensus) and refranchising fails to reignite system sales, the terminal valuation multiple derates 20% toward peer parity at 15.6x, driving an estimated fair value decline of -19.5%.134
Chronic technology software and hardware development cost creep exceeding planned digital kiosk deployment cycles, permanently degrading free cash flow conversion.
現在:4.52% of revenue ($371M capex on $8,214M revenue in FY2025)
警戒条件Capex-to-revenue remaining above 5.50% into FY2027
Escalating interest burdens from refinancing $3.68B in debt maturing across a high interest rate regime, causing annual net interest expense to surge and diluting net earnings.
現在:Pre-tax cost of debt of 6.24% on $11,910M total debt
警戒条件Refinancing coupon rates exceeding 7.50% on senior notes maturing over the next 3 years
Weakened consumer discretionary purchasing power in the UK ($1,021M FY2025 revenue) and international markets breaking unit economics and slowing net new franchise store openings.
現在:$3,542M in FY2025 revenue with 88% non-US system sales
警戒条件Annual constant-currency revenue growth turning negative (<0.0%)
Consumer pushback on meal pricing and digital promotions failing to offset fast-food peer value bundling, leading to ongoing market share loss in core domestic dayparts.
現在:Negative 2% quarter-to-date same-store sales through July 27, 2026
警戒条件Negative same-store sales for two consecutive quarters
| high |
| 12-36 months |
| Deploying an expected $2.3B in net proceeds from Pizza Hut transactions toward revolving debt repayment, supported by substantial annual operating cash generation ($2,010M in FY2025).5 |
| International discretionary consumer weakness and foreign currency depreciation reducing translated royalties, notably in the UK ($1,021M FY2025 revenue). | medium | 12-24 months | Geographic diversification across 140+ countries mitigates localized risk, while local menu pricing adapts to currency shifts. |
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and terminal value at WACC, then adjust for signed net debt per current share.
Discounted forecast-period cash flows ($32.82) plus discounted terminal value ($158) minus signed per current share ($41.04) equals the $150 lens value shown above. Negative net debt is , so subtracting it raises value.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Solve for the growth rate that makes the model value equal the report-date share price.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
In the Bull scenario, KFC Global accelerates international store openings across emerging markets, benefiting from secular dietary tailwinds as chicken outpaces other proteins globally. Taco Bell leverages expanding digital sales mix and loyalty drops to drive customer traffic and ticket growth, maintaining positive domestic same-store sales. Capital expenditures normalize as digital platform investments pass peak intensity, while net proceeds from Pizza Hut transactions eliminate revolving debt and fuel share repurchases. Diluted earnings per share compound rapidly, lifting equity value toward the Bull target of $174.06.5
Higher digital penetration drives larger average order ticket sizes, enhances franchisee labor productivity, and builds loyalty lock-in.
Capex rose to $371M in FY2025 (4.52% of revenue); normalization toward historical levels (~$260M-$280M) is necessary to unlock free cash flow expansion.6
With $11,910M in total debt and a 5.24% risk-free rate, debt paydown mitigates refinancing maturity headwinds.24
| $9.11B |
| $9.56B |
| $9.99B |
| Revenue growth | 6.3% | -1.1% | 5.5% | 5.0% | 4.5% |
| Operating margin | 31.5% | 31.8% | 32.0% | 32.0% | 32.0% |
| Operating income | $2.75B | $2.75B | $2.91B | $3.06B | $3.20B |
| Tax rate | 19.9% | 19.9% | 19.9% | 19.9% | 19.9% |
| NOPAT | $2.20B | $2.20B | $2.33B | $2.45B | $2.56B |
| Reinvestment | $176.16M | $153.92M | $140.06M | $134.81M | $128.07M |
| Reinvestment rate (of NOPAT) | 8.0% | 7.0% | 6.0% | 5.5% | 5.0% |
| Free cash flow to firm | $2.03B | $2.04B | $2.19B | $2.32B | $2.43B |
| Total Division revenue | $8.73B | $8.64B | $9.11B | $9.57B | $10.00B |
| Kfcglobal Division revenue | $3.76B | $3.72B | $3.93B | $4.12B | $4.31B |
| Taco Bell Global Division revenue | $3.29B | $3.25B | $3.43B | $3.60B | $3.77B |
| Other revenue | $2.83B | $2.80B | $2.96B | $3.11B | $3.25B |
| Pizza Hut Global Division revenue | $1.08B | $1.06B | $1.12B | $1.18B | $1.23B |
| The Habit Burger Grill Global Division revenue | $605.68M | $599.08M | $632.03M | $663.63M | $693.49M |
| Phstrategic Options revenue | $7.85M | $7.77M | $8.20M | $8.61M | $8.99M |
| Terminal growth | 2.5% | 2.5% | 2.5% | 2.5% | 2.5% |
Yum! Brands maintains an active capital return program supported by high operating cash flow ($2,010M in FY2025) and disciplined corporate reinvestment. The company repurchased $552M of shares in FY2025 and $670M in 1H 2026 funded by free cash flow and revolver borrowings, significantly outpacing stock-based compensation ($70M) and driving net diluted share count reductions of ~1.2% annually. Looking forward, management expects to use a portion of the anticipated $2.3B in net proceeds from Pizza Hut transactions to pay down revolving debt balances, with the remainder supporting share repurchases. Capital expenditures of $371M in FY2025 reflect investment in digital systems that should normalize toward historical levels (~$260M-$280M), sustaining owner cash generation.
Capex expanded from $285M in FY2023 and $257M in FY2024 to $371M in FY2025 (1.80x D&A of $206M).
As core digital kiosk and drive-thru software rollouts conclude, annual corporate capex will normalize back toward maintenance levels (~$260M), expanding free cash flow conversion.
Total debt stands at $11,910M as of FY2025 ($13,414M as of October 2026) with over $3.68B maturing within 3 years against a 5.24% risk-free rate and 6.24% pre-tax cost of debt.
Refinancing debt tranches at higher rates will raise interest expense, requiring management to deploy expected $2.3B Pizza Hut proceeds toward debt reduction to protect net margins.
KFC Global generated $3,542M (43.1% of consolidated) and Taco Bell generated $3,095M (37.7% of consolidated), totaling over 80% of divisional revenue ($8,220M total).
Earnings compounding relies on international KFC net store expansion (88% non-US system sales) and Taco Bell digital loyalty monetization (47% digital mix).
| マージン |
|---|
| YUM | Yum! Brands Inc. | $37.1B | 20.5x | 4.3x | 16.3x | — | — |
| CMG | Chipotle Mexican Grill Inc. | $40.9B | 23.6x | 3.3x | 20.1x | 49.6% | 16.1% |
| MCD | McDonald's Corporation | $164.1B | 16.8x | 5.9x | 14.6x | — | 46.5% |
| EBAY | eBay Inc. | $47.3B | 15.9x | 3.9x | 16.5x | 46.6% | 21.6% |
| ROST | Ross Stores Inc. | $73.0B | 25.5x | 3.0x | 20.1x | 42.6% | 13.6% |
| Promotional Value Focus and Consumer Price Sensitivity | neutral | Elevated dining and grocery costs have increased consumer price sensitivity, prompting fast-food peers like McDonald's (46.49% operating margin) to introduce aggressive value menus. While driving trade-down traffic, intense promotional competition challenges franchisee unit economics. |
| Asset-Light Refranchising and Capital Optimization | positive | Global restaurant chains are transitioning toward purely franchised operating models. Yum's refranchising and potential portfolio transactions (such as anticipated $2.3B Pizza Hut proceeds) reduce corporate capital requirements and convert store revenues into high-margin royalty streams. |
| Negative same-store sales for two consecutive quarters. |
| Lower forward revenue growth assumptions and trim position weight by 25%. |
| Annual Corporate Capital Expenditures | Capex exceeding $400M in FY2026 without a concurrent acceleration in digital sales mix. | Increase ongoing maintenance capex assumption from 70% to 90%, lowering FCFF DCF valuation. |
| Debt Refinancing Coupon Rate | Coupon rates exceeding 7.50% on newly issued senior notes. | Adjust pre-tax cost of debt upward in WACC schedule and reduce EPS estimates by $0.15-$0.25. |
