Traders Purchase High Volume of Call Options on Yum! Brands (NYSE:YUM)

Yum! Brands, Inc. (NYSE:YUM) was the target of some unusual options trading activity on Friday. Stock traders bought 3,322 call options on the company. This represents an increase of approximately 275% compared to the typical volume of 886 call options.

Yum! Brands Stock Performance

Shares of NYSE YUM opened at $150.55 on Friday. The company has a market capitalization of $41.09 billion, a P/E ratio of 18.94, a price-to-earnings-growth ratio of 2.40 and a beta of 0.55. Yum! Brands has a 52-week low of $134.26 and a 52-week high of $170.14. The company’s 50 day moving average price is $145.48 and its 200-day moving average price is $151.59.

Yum! Brands (NYSE:YUM) last issued its quarterly earnings results on Thursday, July 30th. The restaurant operator reported $1.62 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.58 by $0.04. Yum! Brands had a negative return on equity of 24.57% and a net margin of 25.42%. The firm had revenue of $2.17 billion for the quarter, compared to analyst estimates of $2.18 billion. During the same period in the previous year, the firm earned $1.44 earnings per share. The company’s revenue was up 12.2% compared to the same quarter last year. Analysts forecast that Yum! Brands will post 6.46 earnings per share for the current year.

Yum! Brands Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, September 18th. Investors of record on Wednesday, September 9th were given a dividend of $0.75 per share. This represents a $3.00 dividend on an annualized basis and a dividend yield of 2.0%. The ex-dividend date of this dividend was Wednesday, September 9th. Yum! Brands’s dividend payout ratio (DPR) is presently 37.74%.

Insiders Place Their Bets

In related news, VP David Russell sold 7,961 shares of the business’s stock in a transaction that occurred on Monday, August 3rd. The stock was sold at an average price of $153.15, for a total value of $1,219,227.15. Following the completion of the transaction, the vice president directly owned 11,960 shares in the company, valued at approximately $1,831,674. The trade was a 39.96% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Christopher Turner sold 285 shares of the company’s stock in a transaction that occurred on Wednesday, October 7th. The shares were sold at an average price of $140.11, for a total transaction of $39,931.35. Following the completion of the transaction, the chief executive officer owned 63,225 shares of the company’s stock, valued at $8,858,454.75. This trade represents a 0.45% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 12,778 shares of company stock worth $1,966,393. 0.14% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Yum! Brands

Hedge funds and other institutional investors have recently bought and sold shares of the business. BlackRock Inc. bought a new position in Yum! Brands in the 2nd quarter worth about $4,186,811,000. Wellington Management Group LLP lifted its holdings in Yum! Brands by 1,373.2% in the 2nd quarter. Wellington Management Group LLP now owns 4,631,940 shares of the restaurant operator’s stock worth $740,462,000 after buying an additional 4,317,526 shares during the period. Bank of America Corp DE bought a new stake in Yum! Brands in the second quarter valued at $638,589,000. Legal & General Group Plc bought a new stake in shares of Yum! Brands during the 2nd quarter valued at about $297,591,000. Finally, Bank of New York Mellon Corp purchased a new position in Yum! Brands during the second quarter valued at $279,432,000. Institutional investors own 82.37% of the company’s stock.

Key Stories Impacting Yum! Brands

Here are the key news stories impacting Yum! Brands this week:

• Positive Sentiment: KFC U.S. will replace PepsiCo beverages with Coca-Cola products beginning in January 2027, with the rollout expected to reach all U.S. restaurants by spring. Yum! presents the agreement as part of KFC’s broader menu and beverage refresh, potentially supporting traffic and the brand’s comeback efforts. KFC beverage partnership announcement
• Positive Sentiment: Trading data showed investors purchased 3,322 YUM call options, about 275% above the average daily volume. The activity indicates increased speculative interest in a potential rebound, though options flow alone is not a fundamental catalyst.
• Positive Sentiment: Analysts at Yahoo Finance argued that Yum! Brands could be undervalued following its Taco Bell and KFC refocus. A separate report estimated roughly 19% to 23% potential undervaluation, providing a valuation-based support for the shares if management executes. Yum Brands potential undervaluation
• Neutral Sentiment: Yum! is deepening supplier relationships across KFC, Taco Bell and Pizza Hut to improve ingredient reliability, purchasing efficiency and franchise operations. The longer-term margin benefits remain uncertain. Yum Brands supplier relationships
• Neutral Sentiment: Yum China’s plan to expand Lavazza coffee shops in Hong Kong concerns the separately listed Yum China Holdings, not Yum! Brands, and is unlikely to materially affect YUM.
• Negative Sentiment: Jefferies lowered its Yum! Brands earnings forecasts as Taco Bell sales weaken and the Pizza Hut disposal reduces the earnings outlook. The firm maintained a Hold rating and a $147 price target, reinforcing near-term uncertainty. Jefferies Yum Brands outlook
• Negative Sentiment: Analyst coverage remains broadly neutral, suggesting investors may want clearer evidence that Taco Bell’s performance and the KFC refocus can offset portfolio changes and softer forecasts.

Wall Street Analyst Weigh In

Several equities analysts have recently weighed in on the stock. Royal Bank Of Canada raised their price target on shares of Yum! Brands from $165.00 to $170.00 and gave the stock a “sector perform” rating in a research note on Friday, July 31st. Robert W. Baird dropped their price target on shares of Yum! Brands from $174.00 to $165.00 and set an “outperform” rating on the stock in a research report on Wednesday, September 16th. Deutsche Bank Aktiengesellschaft reissued a “hold” rating and set a $174.00 target price on shares of Yum! Brands in a report on Friday, July 31st. Seaport Research Partners assumed coverage on Yum! Brands in a report on Wednesday, September 16th. They set a “buy” rating and a $162.00 price objective for the company. Finally, Guggenheim decreased their price target on shares of Yum! Brands from $180.00 to $155.00 and set a “buy” rating on the stock in a research note on Tuesday, October 6th. Thirteen investment analysts have rated the stock with a Buy rating and eight have given a Hold rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average target price of $172.56.

Yum! Brands Company Profile

Yum! Brands, Inc is a global restaurant company that develops, operates, and franchises quick-service restaurants. Its portfolio includes KFC, which specializes in fried and cooked chicken; Taco Bell, known for Mexican-inspired food; Pizza Hut, which offers pizza and related products; and The Habit Burger Grill, a fast-casual chain focused on chargrilled burgers, sandwiches, salads, and shakes.

The company primarily uses a franchised business model, working with franchisees and licensees to operate restaurants in more than 150 countries and territories.