Yum! Brands (YUM) solid Q1 results were supported by its Taco Bell and KFC brands, which contributed more than 80% to the company's profits, Oppenheimer said late Wednesday.
Yum! reported Q1 adjusted earnings of $1.30 per diluted share, up from $1.15 a year earlier.
"Amid a choppy backdrop, we believe YUM represents a resilient play underpinned by Taco Bell and KFC-Int," which "hold levers to sustain improved momentum," the research firm said.
Oppenheimer noted that Taco Bell's Q1 9% growth in the US same-store sales stands out in a tough macro environment. Outside the US, the firm expects KFC to accelerate from the current 3% growth recorded in Q1. It also said that it has "more confidence that [KFC] is not seeing geopolitical backlash."
Oppenheimer said the company's affirmation that its full-year earnings before interest and taxes will grow by 8% takes into account improvement in the back-half owing to timing of some expenses in Q2.
Oppenheimer raised its full-year 2025/2026 EPS estimates to $6.07/$6.80 from $6.03/$6.78, citing better foreign exchange rates and lower interest expense.
Oppenheimer reiterated outperform rating on the stock, with a $185 price target.
Price: 148.36, Change: -2.09, Percent Change: -1.39
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.