YUM
Yum! Brands, Inc.
$147.91
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 7.8% below fair value
You pay
$147.91
Bear
$135.80
Fair
$160.50
Bull
$185.19
Bear
$135.80
-8.2%
$5.81 × 22x P/E
Fair
$160.50
+8.5%
$5.81 × 26x P/E
Bull
$185.19
+25.2%
$5.81 × 30x P/E
Key Value Driver
Normalized P/E multiple (26x base case)
Implied Market Multiple
25.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $178.13 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $160.50 per share.
Warnings
Dividend-based valuation: $195.77 (above our primary estimate by 30%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples