13 Best Fast Food Stocks to Buy

4. Yum! Brands, Inc. (NYSE:YUM)

Number of Hedge Fund Holders: 41

Yum! Brands, Inc. (NYSE:YUM) is one of the best fast food stocks to buy. On December 9, Stifel reiterated its Hold rating on Yum! Brands, Inc. (NYSE:YUM) with a price target of $160. This update comes as the company is looking at strategic options for its Pizza Hut business.

Stifel’s analysis suggested that divesting Pizza Hut could boost the company’s overall growth outlook. However, it might lead to lower absolute earnings, which could cancel out any possible valuation gains. The research firm pointed out that divesting the Pizza Hut business could remove “a key source of underperformance risk” and improve investor confidence in more reliable growth ahead for Yum! Brands, Inc. (NYSE:YUM).

Stifel indicated that its view on Yum! Brands, Inc. (NYSE:YUM) has turned “more constructive.” The strategic review shows that the company’s new CEO is serious about boosting value for shareholders. The research firm’s analysis indicates that it would consider recommending shares if the stock dips due to any market moves.

Earlier, on December 5, Piper Sandler also reaffirmed its Neutral rating on Yum! Brands, Inc. (NYSE:YUM) with a price target of $158 as the company explores strategic options for its Pizza Hut business. Piper Sandler pointed out that a complete sale of the business would likely be dilutive to the company’s earnings.

The research firm also indicated that any gains in valuation from divesting the Pizza Hut business are already priced into the stock. Piper Sandler is doubtful about multiple expansion after an actual divestment. The firm pointed out that it is “not obvious” that any further valuation gains would materialize.

Yum! Brands, Inc. (NYSE:YUM) is an American multinational fast food company that operates well-known brands like KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill. With restaurants in over 155 countries and territories, it is one of the largest restaurant companies in the world.