Yum Brands Stock Gets A Double Boost: JPMorgan Follows Goldman's Bullish Take With 'Outperform' Upgrade

The research firm noted the KFC operator's strong projected unit growth, cash flow, and momentum for Taco Bell.

Yum Brands (YUM) shares jumped over 3% on Wednesday, after JPMorgan upgraded its rating on the stock to 'Overweight' from 'Neutral.'

An increasing number of analysts are turning bullish on Yum Brands, the parent of KFC, Pizza Hut, and Taco Bell, citing its strong performance relative to other restaurant sector peers. Goldman Sachs upgraded the stock to 'buy' earlier this month.

JPMorgan said the company's "sustained" 4% unit growth, "strong" free cash flow generation, and pulled-back valuation are behind its upgrade, according to a summary of its investor note on The Fly.

The investment firm projects Taco Bell, Yum Brands' strongest growth driver, to expand 4% globally and 3% in the U.S., as reflected in recent results.

On Stocktwits, the retail sentiment shited to 'neutral as of late Wednesday from 'bullish' a day earlier. Yum Brands shares are up nearly 10% year-to-date.

JPMorgan also expressed confidence in the incoming CEO, expecting him to maintain the company's tech-driven strategy to boost franchisee returns.

Last week, Yum Brands named Chief Financial Officer Chris Turner as its next CEO. He will assume the role on Oct. 1, succeeding David Gibbs, who is set to retire.

The analyst action comes when businesses face risks from an aggressive and evolving U.S. trade policy, which has somewhat dampened consumer spending.

The reported impact on the food and restaurant sector has been mixed across different segments.

Yum delivered robust first-quarter results last month, noting that tariffs only had a minimal effect on its business.

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