Yum! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. The company operates through the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Grill Division segments. It also operates restaurants under the KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill brands, which specialize in chicken, pizza, made-to-order chargrilled burgers, sandwiches, Mexican-style food categories, and other food products. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to Yum! Brands, Inc. in May 2002. Yum! Brands, Inc. was incorporated in 1997 and is headquartered in Louisville, Kentucky.

Yum! Brands appears to be a high-quality but no longer cheap business, with strong operating profitability and notable balance sheet pressure. A P/E ratio of 20.1 is only slightly above the industry median, so on earnings the company does not look extremely expensive, but the P/S ratio of 4.37 and P/FCF of 22.67 are noticeably above industry benchmarks, which limits the re-rating potential. At the same time, valuation multiples have generally declined from higher levels in recent periods, supporting the idea of valuation normalization. Margins remain very strong: an operating margin of 31.0% and a net margin of 25.4% are significantly above the industry, confirming the resilience of the franchise model. ROA of 27.5% and ROI of 64.1% also look outstanding and indicate highly efficient use of assets and capital. However, current liquidity is weak: a current ratio of 0.59, a quick ratio of 0.00, and negative shareholders’ equity point to a structurally strained balance sheet. Long-term debt of $9.46 billion and total liabilities of $15.79 billion remain high, although debt/equity is formally not informative due to negative equity. Revenue, EBITDA, and net income have generally grown over the years, supporting fundamental resilience and reducing the risk of a sharp deterioration in valuation. Dividend yield of around 0.52% is present, but it is too low to be a strong driver of re-rating. Overall, the fundamentals support a moderately positive view of the business quality, but the high valuation on revenue and FCF, as well as the weak balance sheet, limit the upside. For an investor, this means the company deserves a premium for quality and margins, but the current price already partly reflects these advantages. Therefore, it makes sense to slightly lower the target, while maintaining a conservative approach to valuation.

Yum! Brands, Inc.

Сильный индекс, значительно упал. Оптимистичный взгляд на свои позиции резко сменился на неуверенность.

Strong index, significantly down. An optimistic view of his position suddenly changed to uncertainty.

Средний индекс, значительно вырос. Рынок не поддерживает быков.

Medium index, significantly up. The market does not support the bulls.

Средний индекс, незначительно вырос. Отток средств из лонгов снизился, но остается значительным.

Medium index, slightly up. The outflow of funds from longs has decreased, but remains significant.

Strong margins and profit growth support YUM, but expensive multiples and a weak balance sheet limit revaluation potential.

Key Points
Rate hikes may reshape dining choices, but they don’t mean consumers are exiting.
Winners will look to increase consumer traffic without compromising profitability.
The Fed's rate hike is a stress test that companies with conservative balance sheets will pass.
The Federal Reserve raised interest rates yesterday for the first time in three years – and for restaurants, the timing of the 25-basis-point hike is far from ideal.
Restaurants are already under pressure. The National Restaurant Association reported that customer traffic declined in July 2026, marking the 17th month of decline in the last 18 months.
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But what if the hike and the general trends seen in restaurants actually strengthen the case for some of them? Is the fast-food meal under $10 becoming more attractive relative to a sit-down dinner priced over $30? Here's how restaurant investors can navigate rising interest rates.
Image source: Getty Images.
Rate hikes don't mean consumer exits
Customer footfall has been declining over the last 18 months. A McKinsey analysis earlier this year shows that diners are becoming more cost-conscious as restaurant and takeout costs climbed faster than grocery prices. Spending growth in both full-service and limited-service restaurants has declined faster than transaction growth, suggesting that consumers continue to dine out but are increasingly mindful of their spending.
Yesterday's rate hike (along with one more hike proposed this year) could further tighten household budgets on account of tariffs and inflationary fears. TGI Friday's CEO
Restaurants such as Restaurant Brands International (NYSE:QSR) and Yum! Brands (NYSE:YUM) that can mould their offerings around value menus and diversify lower-priced options are more likely to benefit.
The proof lies in the pudding. Both restaurant chains have benefited from increasing footfall and expanding profit margins.
For investors, the key question is whether restaurants can keep adapting to changing consumer behavior. Being a fast-food chain is no longer enough to guarantee growth.
Winners will increase traffic without compromising profitability
At the end of the day, a business has to become more economically valuable. Along with growing consumer traffic, it's essential that restaurants have the ability to maintain their pricing power.
The Cheesecake Factory (NASDAQ:CAKE) offers a useful example. For the second fiscal quarter of 2026, the bakery operator saw comparable sales increase 5.8% year-over-year, while traffic rose 2.7%. Importantly, restaurant-level profit margin reached a decade-high of 20%. Not surprisingly, the stock is up 77% in 2026.
In short, gaining customers without having to give up on profitability is the biggest competitive advantage right now.
The Fed hike is a stress test
Finally, I'd be wary of franchise-heavy restaurant businesses that rely on taking on debt to expand into new locations, remodel existing locations, pay dividends, or even buy back shares. These businesses may not find the hike pleasant.
On the other hand, companies with relatively low exposure to interest rate changes due to lower debt on the balance sheet and the ability to maintain solid free cash flow will be able to fund their own remodels or menu changes, and will again have a significant edge over those that may end up with higher borrowing costs.
Yesterday's rate hike does not make a restaurant stock attractive -- or unattractive -- on its own. Instead, I'm treating it as a stress test. Can restaurant businesses keep growing consumer traffic without sacrificing margins?
That is the key question investors should ask.
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The Fed Hiked Interest Rates for the First Time in 3 Years to Slow Down Inflation and Deliver Price Stability. Here’s What That Means for Restaurant Stocks.

For Immediate Release
Chicago, IL – September 16, 2026 – Zacks Equity Research shares Arista Networks, Inc. ANET as the Bull of the Day and Yum! Brands, Inc. YUM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corporation NVDA and Broadcom Inc AVGO
Here is a synopsis of all five stocks:
Arista Networks, Inc. is a high-tech picks-and-shovels AI stock that more than doubled its revenue and earnings between 2022 and 2025.
The AI infrastructure company, which works directly with AI hyperscalers Microsoft and Meta and other big tech firms, is projected to follow up its impressive artificial intelligence-boosted expansion with 35%+ revenue and earnings growth in 2026 and another ~25% next year.
Arista’s earnings outlook surged again after it reported another strong beat and raise quarter in early August.
Its upbeat EPS revisions earn ANET a Zacks Rank #1 (Strong Buy) and extend an impressive streak of improving earnings estimates as it successfully rides the AI data center boom and other technology trends.
The back-end technology infrastructure company designs and builds tons of the critical, high-speed tech-based “plumbing” that massive AI data centers rely on. This means that investors don’t have to worry about picking the front-facing winners as OpenAI, Anthropic, Google, and tons of others duke it out in the AI arms race.
ANET’s balance sheet is fantastic, and it's churning out stellar free cash flow growth. Plus, the stock is finding technical support after pulling back from its early-August peaks, and its average Zacks price target implies 30% upside.
All in, Arista stock appears to be one of the better long-term buy-and-hold stocks in the broader AI infrastructure industry.
It is worth stressing that despite AI bubble fears, $750 billion in new AI capex initiatives were announced in August alone, adding to a pipeline that’s already measured in trillions of dollars over the next several years.
Is ANET the Best AI and Tech Stock to Buy Now and Hold Forever?
Arista is a client-to-cloud networking powerhouse for large AI, data center, campus, and routing environments. Its growing portfolio helps connect computers, servers, and beyond to ensure fast and reliable data transfer.
In layman’s terms, ANETdesigns and builds the critical, high-speed technological “plumbing” networks that massive cloud computing and AI data centers depend on. Put differently, Arista makes the networking gear that enables huge data centers to talk to themselves at extreme speed.
When Microsoft, Meta, and others train AI models, thousands of chips must pass data back and forth constantly. Arista’s switches and beyond are the highway or tech-based railways that those chips use.
Arista’s offerings like high-speed Ethernet switches and networking gear are vital behind-the-scenes cogs helping massive AI data centers perform at their absolute peak.
ANET’s CEO Jayshree Ullal explained the company’s role in the current tech supercycle succinctly in prepared Q2 remarks, noting that “Customers see networking as the central nervous system for infrastructure from the client to campus to data and AI centers.”
Microsoft and Meta are two of Arista’s largest clients, highlighting its best-in-class offerings and ability to compete against rivals such as Cisco.
The explosion of cloud computing, big data, and most recently and critically, AI, puts Arista in a position to continue expanding and thriving as these areas of technology drive the economy and Wall Street.
Goldman Sachs projects that total global AI capex will reach $7.6 trillion between 2026 and 2031, across compute, data centers, and power. The AI hyperscalers alone are projected to spend ~$800 billion in AI-related capex in 2026 and then ramp up again in 2027.
The Top-Rank AI Stock’s Strong Growth and Outlook
ANET is thriving amid the ongoing AI infrastructure boom. And it's poised for long-term success even as the technologies mature beyond their rapid growth phase.
The company is churning out stellar free cash flow growth that’s helping improve its balance sheet. Arista is sitting on $13.3 billion in cash and equivalents and $23.7 billion in total assets vs. near-zero debt and $8.9 billion in total liabilities.
The company more than doubled its revenue between 2022 ($4.38 billion) and 2025 ($9.00 billion), after more than doubling its top line between 2016 and 2021.
The picks-and-shovels AI stock also more than doubled its GAAP earnings between 2022 and 2025, soaring from $1.07 a share to $2.75 per share last year.
Most recently, it beat our Q2 earnings estimate by 15% on August 4 and upped its outlook once again after reporting its “first $3 billion quarter,” boosted by the ongoing success of its Arista 2.0 platform strategy.
Arista's Q3 earnings estimate surged 19% after its Q2 release, with its FY26 EPS estimate up 11% and its FY27 outlook 14% higher.
ANET’s upward earnings revisions land the stock a Zacks Rank #1 (Strong Buy) and extend its run of upward EPS revisions. It has also beaten our EPS estimates for five years running.
Our detailed analyst report about Arista on Zacks.com highlights a concise bull case for why investors should buy the stock: “Arista strengthened its position in AI networking as enterprises and hyperscale customers expand Ethernet-based AI infrastructure.”
“During the second quarter of 2026, the company exceeded 100 cumulative AI fabric customers using Etherlink switches, compared with only a handful of early adopters in 2024. Management also expects AI revenue to reach at least $3.6 billion in 2026, supported by scale-up, scale-out and scale-across deployments.”
Looking ahead, Arista is projected to grow its revenue by another 39% in FY26 (after 29% sales growth last year) and 26% in 2027 to reach $15.80 billion next year.
The networking infrastructure firm is projected to grow its adjusted EPS by 36% in 2026 and 24% next year to $4.99 per share. The chart above showcases that ANET is expected to expand its bottom line to over $6.00 per share in FY28.
Buy the AI Picks-and-Shovels Stock Now?
ANET soared ~3,500% over the past decade, crushing the Zacks Tech sector’s ~485% and the all of the Magnificent 7 tech stocks outside of Nvidia. The stock has ripped ~47% higher in 2026 to outclimb Tech’s 18% and leave two of its biggest clients, Microsoft and Meta, in the dust.
The AI stock has dropped around 9% from its August records, and its average Zacks price target implies 30% upside.
ANET found support at its 50-day moving average on Monday, September 14, and it trades at neutral RSI levels.
Valuation-wise, Wall Street has paid a significant premium for ANET for the past 10 years. Still, Arista trades at a 25% discount to its highs at 43.6X forward 12-month earnings and 50% below its peaks when factoring in its earnings growth outlook, with a PEG ratio of 1.9.
Yum! Brands, Inc. is the restaurant giant behind KFC, Taco Bell, and Habit Burger & Grill.
Yum’s earnings outlook has trended lower over the last several years as it struggles against headwinds facing the entire fast food industry.
The company is trying to adapt, and it even sold one of its struggling, yet iconic brands, Pizza Hut, recently. Its recent wave of downward earnings revisions land the stock a Zacks Rank #5 (Strong Sell) right now.
Should Investors Stay Away from YUM Stock Right Now?
Yum! Brands is the parent company behind Taco Bell, KFC, and fast-casual concept Habit Burger.
The company and its subsidiaries franchise or operate more than 44,000 restaurants in 150 countries.
The company announced in the middle of June that it entered into “definitive agreements to sell Pizza Hut for $2.7 billion in the aggregate, subject to certain purchase price adjustments…”
“Pizza Hut, excluding Mainland China, will be acquired by LongRange Capital, a private equity firm with a customer-centric and operationally oriented approach, and Pizza Hut in Mainland China will be acquired by Yum China Holdings, Inc. (YUMC).”
Yum is struggling against an array of headwinds battering its standing on Wall Street and with some customers.
The owner of KFC and beyond is trying to navigate inflation that’s hitting lower-income customers, as well as the negative impact of changing eating habits and the rise of GLP-1 diets.
Yum is still projected to grow its revenue and earnings at solid rates in 2026 and 2027.
But its downward earnings revisions land it a Zacks Rank #5 (Strong Sell) right now. They are also part of a long-term trend of negative earnings revisions.
The fast-food giant has climbed only 10% in the past five years, while the S&P 500 jumped ~75%.
Plus, YUM’s Retail – Restaurants industry sits in the bottom 34% of ~250 Zacks industries. All in, it might be best for investors looking to buy stocks right now to look elsewhere until Yum proves it’s ready to turn things around.
Additional content:
NVIDIA vs. Broadcom: Which AI Stock Should You Buy After Earnings?
NVIDIA Corporation and Broadcom Inc both have capitalized on the robust artificial intelligence (AI) spending, with their latest quarterly results highlighting strong performance across key AI-related businesses. This raises an important question: which among the two is a better buy now for investors? Let’s have a look –
NVDA’s AI Growth Momentum Remains Strong as Demand Soars
According to NVIDIA’s Aug. 26 press release, the company’s fiscal second-quarter 2027 revenues reached $96.2 billion, up 106% year over year and 18% quarter over quarter. The Data Center business remained the key growth driver, generating $89 billion in revenues, up 117% year over year and 18% sequentially.
Alongside rapid top-line growth, NVIDIA delivered strong profitability. The company’s non-GAAP gross margin came in at 75%, up from 72.5% a year ago. Notably, continued high operating income helped the company translate its revenue gains into faster earnings growth.
NVIDIA’s growth momentum is expected to continue in the next quarter as well. The company expects revenues of around $108 billion, plus or minus 2%, in the fiscal third quarter of 2027, up 12% sequentially from the midpoint. NVIDIA, in reality, is well-positioned to gain from the next wave of AI investment as its cutting-edge Vera Rubin platform is already in full production
Solid Chip and Networking Demand Drives AVGO’s AI Business
Broadcom reported $29.6 billion in revenues for the fiscal third quarter of 2026, up 86% year over year, according to the company’s Sept. 2 press release. The key takeaway is that Broadcom’s AI semiconductor revenues reached $16.7 billion, up 221% year over year and 54% sequentially.
Broadcom continues to benefit from the AI boom through custom chips and high-speed networking solutions. Ongoing AI spending is helping Broadcom’s business gain momentum quarter over quarter. The company now expects AI semiconductor revenues to accelerate to $21.7 billion in the fiscal fourth quarter of 2026, increasing 236% year over year. Consolidated revenue guidance for the fiscal fourth quarter stands at $34.8 billion, up 93% year over year.
Along with rapid revenue growth, Broadcom’s profitability remains a major strength. Broadcom’s non-GAAP operating income rose 92% year over year to $20.1 billion in the fiscal third quarter, while free cash flow climbed 95% to $13.7 billion, giving the company strong financial flexibility to invest in research and development as well as growth.
NVIDIA or Broadcom: The Better AI Stock to Buy Post Earnings
The latest quarterly results show that NVIDIA is witnessing strong AI-driven growth led by Data Center demand. Broadcom, on the other hand, is benefiting from an increase in demand for its custom AI chips and networking solutions.
However, NVIDIA has a broader competitive moat that extends beyond its chips. While Broadcom’s AI opportunity is mostly centered on custom accelerators and networking, NVIDIA has created a powerful ecosystem by combining graphics processing units, CUDA, networking and AI software.
NVIDIA also benefits from a more diversified customer base than Broadcom’s handful of custom-accelerator businesses. Moreover, NVIDIA has demonstrated enormous scale while maintaining strong growth and profitability.
Lastly, NVIDIA’s 63.7% net profit margin, compared with Broadcom’s 42.9%, indicates NVIDIA’s greater efficiency in converting revenues into bottom-line profits.
Therefore, NVIDIA appears to be the better buy than Broadcom, thanks to its stronger AI ecosystem, broader customer base, scale and stronger profitability. Additionally, NVIDIA appears more attractively valued than Broadcom. Per the price-to-earnings ratio, NVDA trades at 22.85 forward earnings compared with AVGO’s 29.24 forward earnings multiple.??????
NVIDIA currently has a Zacks Rank #1 (Strong Buy), while Broadcom has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.???
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This innovative software-as-a-service firm upped its user base +22% year over year. That rate is increasing and margins are expanding as AI efficiencies take effect. Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
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Arista Networks highlighted as Zacks Bull and Yum! Brands Bear of the Day

Yum! Brands, Inc. YUM is the restaurant giant behind KFC, Taco Bell, and Habit Burger & Grill.
Yum’s earnings outlook has trended lower over the last several years as it struggles against headwinds facing the entire fast food industry.
The company is trying to adapt, and it even sold one of its struggling, yet iconic brands, Pizza Hut, recently. Its recent wave of downward earnings revisions land the stock a Zacks Rank #5 (Strong Sell) right now.
Should Investors Stay Away from YUM Stock Right Now?
Yum! Brands is the parent company behind Taco Bell, KFC, and fast-casual concept Habit Burger.
The company and its subsidiaries franchise or operate more than 44,000 restaurants in 150 countries.
Image Source: Zacks Investment Research
The company announced in the middle of June that it entered into “definitive agreements to sell Pizza Hut for $2.7 billion in the aggregate, subject to certain purchase price adjustments…”
“Pizza Hut, excluding Mainland China, will be acquired by LongRange Capital, a private equity firm with a customer-centric and operationally oriented approach, and Pizza Hut in Mainland China will be acquired by Yum China Holdings, Inc. (YUMC).”
Image Source: Zacks Investment Research
Yum is struggling against an array of headwinds battering its standing on Wall Street and with some customers.
The owner of KFC and beyond is trying to navigate inflation that’s hitting lower-income customers, as well as the negative impact of changing eating habits and the rise of GLP-1 diets.
Yum is still projected to grow its revenue and earnings at solid rates in 2026 and 2027.
But its downward earnings revisions land it a Zacks Rank #5 (Strong Sell) right now. They are also part of a long-term trend of negative earnings revisions.
Image Source: Zacks Investment Research
The fast-food giant has climbed only 10% in the past five years, while the S&P 500 jumped ~75%.
Plus, YUM’s Retail – Restaurants industry sits in the bottom 34% of ~250 Zacks industries. All in, it might be best for investors looking to buy stocks right now to look elsewhere until Yum proves it’s ready to turn things around.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This innovative software-as-a-service firm upped its user base +22% year over year. That rate is increasing and margins are expanding as AI efficiencies take effect. Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).

Bear of the Day: Yum! Brands, Inc. (YUM)

Looking at the universe of stocks we cover at Dividend Channel, on 9/9/26, Yum! Brands Inc (Symbol: YUM) will trade ex-dividend, for its quarterly dividend of $0.75, payable on 9/18/26. As a percentage of YUM's recent stock price of $149.29, this dividend works out to approximately 0.50%.
In general, dividends are not always predictable; but looking at the history above can help in judging whether the most recent dividend from YUM is likely to continue, and whether the current estimated yield of 2.01% on annualized basis is a reasonable expectation of annual yield going forward. The chart below shows the one year performance of YUM shares, versus its 200 day moving average:
Looking at the chart above, YUM's low point in its 52 week range is $137.33 per share, with $170.14 as the 52 week high point — that compares with a last trade of $149.91.
According to the ETF Finder at ETF Channel, YUM makes up 4.51% of the AGF U.S. Market Neutral Anti-Beta Fund ETF (Symbol: BTAL) which is trading lower by about 0.6% on the day Tuesday. (see other ETFs holding YUM).
In Tuesday trading, Yum! Brands Inc shares are currently off about 0.9% on the day.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »
Further YUM Research:

Yum! Brands About To Put More Money In Your Pocket (YUM)

McDonald’s Corporation MCD is trading at a valuation that appears relatively attractive compared with the broader restaurant industry. The company’s forward 12-month P/E multiple of 19.15X is below the industry average of 22.57X, suggesting that investors are taking a more cautious view of the fast-food giant despite its powerful brand, global scale and resilient franchise-driven business model.
P/E (F12M)
The discount follows a difficult period for the stock. MCD’s shares have declined 20.8% over the past six months, compared with a 10.2% drop for the restaurant industry. The stock has also lagged the S&P 500’s 12% gain, as investors have favored companies with stronger near-term growth prospects. McDonald’s has underperformed restaurant peers including Starbucks Corporation SBUX, Yum! Brands, Inc. YUM and Chipotle Mexican Grill, Inc. CMG.
The key question for investors is whether this weakness reflects longer-lasting fundamental concerns or creates an attractive entry point into a globally recognized restaurant leader.
U.S. Weakness Weighs on Performance
McDonald’s second-quarter results highlighted both its strengths and the areas requiring improvement. Global comparable sales increased 1.3%, while systemwide sales rose 4% in constant currency. Adjusted EPS came in at $3.38, up 5% year over year on a constant-currency basis.
However, the U.S. business remained a key weakness. Comparable sales increased just 0.8% in the quarter, as execution issues affected traffic and customer experience. Management attributed roughly two-thirds of the U.S. traffic shortfall compared with expectations to problems surrounding value execution. The weaker-than-expected impact of the FIFA marketing campaign compounded the underperformance.
The company also acknowledged that restaurant teams were burdened by too many simultaneous product launches, promotions and operational changes. Management plans to simplify restaurant operations and provide crews with greater support, while increasing targeted digital offers and reallocating marketing spending toward proven value programs such as Extra Value Meals.
Importantly, McDonald’s does not view these issues as a fundamental strategy problem. Management believes the primary opportunity is to improve execution, particularly around value, operations and marketing.
International Business Provides Stability
McDonald’s international operations continue to offer an important counterbalance to U.S. weakness. Comparable sales increased 1.5% in International Operated Markets, with Germany, Australia and the United Kingdom performing well. International Developmental Licensed Markets posted 1.9% comparable-sales growth, led by Japan, which delivered its 10th consecutive quarter of positive comparable guest-count growth.
Management expects comparable-sales growth in both international segments to accelerate sequentially in the third quarter, offering a potential source of momentum while the U.S. business works through its execution challenges.
Beverages and McDonald’s NEXT Could Support Growth
One of the more encouraging developments is McDonald’s new beverage platform. Early results in the United States, Canada and Germany exceeded expectations, with beverages generating new occasions, higher guest checks and strong food attachment. More than half of beverage-related traffic is occurring after lunch, while average checks are about 50% above the full-day average.
Longer term, management is positioning McDonald’s NEXT as a growth framework focused on improving food taste and quality, enhancing hospitality, simplifying restaurant operations and strengthening customer engagement. The company expects productivity gains to help fund investments associated with the strategy.
MCD is also maintaining the restaurant expansion plans, although it has pushed the 50,000-restaurant target to 2028 from 2027 because of inflationary development costs and a more pressured consumer environment. McDonald’s still expects to open roughly 2,600 gross restaurants in 2026.
McDonald’s Growth Outlook Remains Encouraging
Analysts continue to see room for earnings growth at McDonald’s, although estimates have been mixed recently. Over the past 30 days, the Zacks Consensus Estimate for 2026 earnings increased 2 cents to $12.87 per share, while the 2027 estimate declined 13 cents to $13.89. Despite the revisions, the estimates imply solid year-over-year EPS growth of 5.5% in 2026 and 7.9% in 2027.
Revenue expectations also point to continued expansion. The Zacks Consensus Estimate projects revenues of $28.15 billion in 2026 and $29.51 billion in 2027, representing year-over-year growth of 4.7% and 4.8%, respectively. These projections indicate that McDonald’s remains positioned for steady top-line and earnings growth, supported by its global scale, restaurant expansion and ongoing initiatives to strengthen customer traffic and engagement.
Why Investors Should Hold MCD
McDonald’s has strong long-term potential, backed by its powerful brand, global presence and franchise model. Its beverage platform and McDonald’s NEXT strategy could support growth.
However, the U.S. business still faces execution issues in value, operations and marketing. Management is taking steps to address these challenges, but the recovery may take time. Existing investors should hold MCD and wait for clearer signs of improvement. New investors may want to wait before buying, as stronger U.S. traffic and execution would provide greater confidence in the recovery.
MCD currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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McDonald's Trades at 19.15X P/E: Is This a Discounted Opportunity?

In a move aimed at easing domestic food prices, U.S. President Donald Trump announced a temporary 90-day waiver last Friday on out-of-quota tariffs for up to 300,000 metric tons of imported ground beef trimmings. The policy suspends the customary duties that typically apply to beef imports exceeding established quota limits, effectively opening the floodgates for cheaper foreign beef to enter America.
This decision comes at a critical juncture for the American beef industry, considering the U.S. cattle herd has shrunk to its lowest level since 1951, caused by years of drought, rising feed costs and persistent inflationary pressures that have forced ranchers to reduce their herds. The smaller cattle herd has driven domestic beef prices to record highs, placing immense strain on foodservice operators, restaurants and ultimately consumers, who have been facing higher menu prices lately.
As a direct result of this tariff relief, wholesale ground beef costs are projected to decline meaningfully over the next three months. This should translate into immediate margin expansion for fast-food giants and meat distributors that rely heavily on blended beef products for their core menus.
Consequently, companies with significant exposure to ground beef consumption — alongside the exchange-traded funds (ETFs) that hold them — are well-positioned to benefit from this policy shift. Following the tariff waiver, lower input costs for imported lean beef trimmings should create a distinct opportunity for investors to capitalize on the improving profitability of these key players in the foodservice supply chain.
But before diving into the specifics of these ETFs, let us first examine the companies benefiting from this tariff waiver so that investors can make a fully informed decision about where to allocate their capital.
Key Corporate Beneficiaries of Lower Beef Costs
The primary beneficiaries of this tariff waiver fall into two distinct categories, each with its unique exposure to the ground beef supply chain.
The first one is the fast-food chains, which blend cheaper beef trimmings with domestic fatty cattle trimmings to produce their burger patties, taco fillings and other beef-based menu items. With wholesale costs expected to decline, operating margins for companies with heavy beef menus are set to expand significantly.
Under this category, McDonald's Corporation MCD, as the largest single buyer of beef in the United States, will perhaps be the most significant beneficiary of this waived tariff. MCD relies heavily on lean beef trimmings from global trade partners such as Australia and South America to manufacture its burger patties.
On the other hand, Yum! Brands YUM, while primarily known for KFC and Pizza Hut, is also expected to benefit from this policy shift through Taco Bell's massive ground beef consumption.
The second category of beneficiaries that stand to gain from the lower input costs of beef as a result of the 90-day tariff waiver is major meat processors and distributors. These companies with international sourcing networks are uniquely positioned to capitalize on the duty-free imports. They can blend lower-cost foreign beef with domestic trimmings, improving their processing margins and competitive positioning in the U.S. market.
These companies include JBS N.V JBS, the world’s largest meat processor, as well as food distributors such as US Foods Holding Corp. USFD and Sysco Corporation SYY, which purchase wholesale beef and distribute it to foodservice chains across America.
ETFs to Gain
Considering the aforementioned discussion, the following ETFs can be expected to gain from the recently waived tariffs on beef import.
State Street Consumer Discretionary Select Sector SPDR ETF XLY
This fund, with assets under management (AUM) worth $23.10 billion, offers exposure to 47 companies in specialty retail; broadline retail; hotels, restaurants and leisure; textiles, apparel and luxury goods; household durables; automobiles; automobile components; distributors; leisure products; and diversified consumer services. MCD holds the fourth spot in this fund, with 4.16% weightage, while YUM holds the 29th spot with 1.07% weightage.
XLY has inched up 0.9% over the past year and charges 8 basis points (bps) as fees. It traded at a good volume of 4.16 million shares in the last trading session.
Invesco Leisure and Entertainment ETF PEJ
This fund, with a market value worth $373.2 million, offers exposure to 31 companies that are principally engaged in the design, production or distribution of goods or services in the leisure and entertainment industries. SYY holds the third spot in this fund, with 4.99% weightage, while USFD holds the 11th spot with 3.29% weightage.
PEJ has rallied 15.4% over the past year and charges 57 bps as fees. It traded at a volume of 0.02 million shares in the last trading session.
First Trust Consumer Staples AlphaDEX ETF FXG
This fund, with net assets worth $235.8 million, offers exposure to 40 stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology. JBS holds the third spot in this fund, with 4.59% weightage.
FXG has risen 2.3% over the past year and charges 63 bps as fees. It traded at a volume of 0.002 million shares in the last trading session.
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This article originally published on Zacks Investment Research (zacks.com).

ETFs to Gain as Trump Waives Off Tariffs on Beef Imports Temporarily

(RTTNews) - Pizza Hut, a subsidiary of Yum! Brands Inc. (YUM) on Tuesday launched a new national football-season campaign with Pepsi and NFL quarterback Josh Allen, centered on the message that "gameday starts with the Hut."
The campaign features advertising spots starring Allen and Pizza Hut mascot Hutty, while the company is also sponsoring quarterbacks across the country with a chance to win free pizza for life.
As part of the campaign, Pizza Hut introduced two limited-time offers: a $10 large three-topping pizza and a new Triple Treat Box GameDay Edition, featuring two pizzas, breadsticks and cinnamon sticks starting at $21.99. Customers can add a 2-liter bottle of Pepsi for $2.
Pizza Hut is also offering limited-edition pizza boxes that can be converted into football field goal posts, with two boxes creating a football field when placed back-to-back.
The offers are available at participating Pizza Hut locations nationwide, in restaurants, online and through the Pizza Hut app.

Pizza Hut Launches Football Season Campaign With Pepsi, Josh Allen

In trading on Monday, shares of Yum! Brands Inc (Symbol: YUM) crossed above their 200 day moving average of $154.63, changing hands as high as $158.05 per share. Yum! Brands Inc shares are currently trading up about 2.6% on the day. The chart below shows the one year performance of YUM shares, versus its 200 day moving average:
Looking at the chart above, YUM's low point in its 52 week range is $137.33 per share, with $170.14 as the 52 week high point — that compares with a last trade of $156.94. The YUM DMA information above was sourced from TechnicalAnalysisChannel.com
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
Further YUM Research:

Yum! Brands Shares Cross Above 200 DMA

The Wendy's Company WEN is confronting a sharp traffic problem as new leadership begins a broad turnaround aimed at restoring customer demand. In the second quarter of fiscal 2026, U.S. traffic declined 12.5%, contributing to a 7% decrease in U.S. same-restaurant sales. A 5.6% increase in average check provided a partial offset, while U.S. same-restaurant sales improved sequentially by 80 basis points from the first quarter. Still, the magnitude of the traffic decline highlights the challenge facing the restaurant chain as it works to reconnect with consumers.
Management sees the traffic weakness as more than consumer pressure, citing erosion in food-quality differentiation, a weaker value proposition, inconsistent execution and ineffective traffic-driving marketing. Wendy’s five-point reset targets these issues through menu and value improvements, sharper branding, stronger operations, better digital engagement and improved restaurant economics. The menu overhaul will span ingredients, items, categories and pricing architecture.
Better execution and digital engagement could support recovery. U.S. customer satisfaction improved, while company-operated restaurants outperformed the broader U.S. system in same-restaurant sales by 280 basis points. Wendy’s also invested $8.3 million in technology, including app enhancements and targeted marketing. However, July traffic remained in line with fiscal second-quarter trends, and management expects continued traffic pressure through the second half of fiscal 2026 while it develops the broader turnaround plan.
Wendy’s five-point reset directly targets several factors contributing to its traffic weakness, particularly value, food quality, marketing and execution. If these initiatives improve customer perception and frequency, demand could gradually recover. However, with traffic trends still weak, measurable improvement in visits and same-restaurant sales will be the clearest test of whether the turnaround is gaining traction.
How WEN Stacks Up Against Key QSR Rivals
Starbucks Corporation SBUX provides a relevant turnaround benchmark for Wendy’s because it is using stronger store execution, menu innovation and loyalty engagement to rebuild transactions. Under its Back to Starbucks strategy, Green Apron Service has improved staffing, operating routines and service consistency, while marketing and beverage innovation are creating more reasons for customers to visit across dayparts. These efforts helped drive U.S. comparable sales growth of 7.9% in the third quarter of fiscal 2026, including a 4.2% increase in transactions, while Starbucks Rewards reached 35.8 million 90-day active U.S. members.
Yum! Brands, Inc. YUM offers another useful comparison through Taco Bell, which continues to combine value, innovation, cultural relevance and digital engagement to drive traffic and market-share gains. Taco Bell delivered 7% same-store sales growth in the second quarter of 2026, outperforming the broader QSR industry for the ninth consecutive quarter. Digital sales mix reached 47%, up 5 percentage points year over year, with more than half of that growth coming from first-party loyalty channels. Its restaurant-level margin also expanded 170 basis points to 26.2%, demonstrating how stronger demand can translate into improved restaurant economics.
Against this backdrop, Wendy’s faces a demanding traffic recovery. Starbucks is already translating improved execution and loyalty engagement into transaction growth, while Taco Bell is using value, innovation and digital capabilities to sustain QSR outperformance.
WEN’s Price Performance, Valuation & Estimates
Shares of Wendy’s have gained 12.5% in the past three months, outperforming the Zacks Retail - Restaurants industry, the broader Retail and Wholesale sector and the S&P 500 index.
WEN Three-Month Price Performance
From a valuation standpoint, WEN trades at a forward price-to-sales (P/S) multiple of 0.75, below the industry’s average of 3.12.
WEN’s P/S Ratio (Forward 12-Month) vs. Industry
WEN’s earnings estimates for 2026 and 2027 have trended downward in the past 30 days. The revised estimates for 2026 imply year-over-year growth of 2.1%, while 2027 estimates imply a year-over-year decline of 39.8%.
EPS Trend of WEN Stock
WEN’s Zacks Rank
WEN stock currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Wendy's Traffic Falls 12.5%: Can Its 5-Point Reset Revive Demand?

(RTTNews) - Yum! Brands (YUM) announced the appointment of Stephen B. Bratspies to its Board of Directors, effective August 26, 2026. Bratspies most recently served as Chief Executive Officer of HanesBrands, where he also served as a member of the Board of Directors. Bratspies currently serves on the Board of Directors of Target and The Clorox Company.
Prior to joining HanesBrands, Bratspies served as Chief Merchandising Officer at Walmart, where he also held several other senior leadership positions, including Executive Vice President, Food, and Executive Vice President, General Merchandise. Earlier in his career, Bratspies served as Chief Marketing Officer of Specialty Brands, a frozen foods company.
At last close, Yum! Brands stock was trading at $152.33 on NYSE.

Indicator	Mar 26	Apr 26	Jun 26	Aug 26	Sep 26	TTM	Median
P/E	24.96	25.75	20.11	—	—	20.11	17.39
Price/Sales	5.09	5.46	5.10	—	4.37	4.37	0.66
P/B	15.39K	—	15.91K	—	0.00	0.00	1.68
P/FCF	26.21	—	26.45	—	22.67	22.67	12.74

Indicator	Mar 26	Apr 26	Jun 26	Aug 26	Sep 26	TTM	Median
ROE	0.00	—	0.00	—	—	0.00	15.36
ROA	22.78	—	27.47	—	—	27.47	4.97
ROI	48.90	—	64.11	—	—	64.11	8.47
Net Worth	43.17	44.54	44.28	42.47	—	42.47	0.82
Quick Ratio	0.00	—	0.00	—	—	0.00	0.85
Current Ratio	0.65	—	0.59	—	—	0.59	1.38

Indicator	Mar 26	Apr 26	Jun 26	Aug 26	Sep 26	TTM	Median
Net Profit Margin	20.48	—	25.42	—	—	25.42	5.79
Operating Margin	31.49	—	31.01	—	—	31.01	8.36
Gross Margin	68.89	—	68.13	—	—	68.13	39.57
Return on tangible equity	0.00	—	0.00	—	—	0.00	22.12

Indicator	Mar 26	Apr 26	Jun 26	Aug 26	Sep 26	TTM	Median
EPS	1.50	1.50	1.62	—	—	1.62	0.52
EPS Forecast	1.39	1.39	1.59	—	—	1.59	0.51
Revenue	2.06B	—	2.17B	—	—	2.17B	193.00M
Gross Profit	1.38B	—	1.47B	—	—	1.47B	—
EBITDA	704.00M	—	714.00M	—	—	714.00M	—

Yum! Brands, Inc.

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