Yum! Brands, Inc. (YUM) Stock Valuation — PE Analysis
Restaurants · NYSE
Current Price
$151.92
PE Ratio (TTM)
30.9x
Intrinsic Value
$138.88
-9.4% margin of safety
COMPETITIVE MOAT
↑Global Brand Recognition and Scale
YUM's portfolio of brands like KFC and Taco Bell are globally recognized. This scale provides significant purchasing power and operational efficiencies.
↑Franchise Model Efficiency
The vast majority of YUM's restaurants are franchised. This model reduces capital expenditure and transfers operational risk to franchisees.
↑Supply Chain Dominance
YUM leverages its massive scale to negotiate favorable terms with suppliers. This creates a cost advantage for its franchisees.
INVESTMENT RISKS
↓Franchisee Financial Health
YUM's reliance on franchisees means their financial stability is critical. Economic downturns or operational issues can negatively impact franchisee performance and royalty streams.
↓Changing Consumer Preferences
Evolving tastes, dietary trends, and demand for healthier options can shift consumer traffic away from YUM's core offerings if brands fail to adapt.
↓Geopolitical and Economic Instability
Global operations expose YUM to risks from political unrest, currency fluctuations, and varying economic conditions in different markets.
Base case
YUM base case PE valuation
At a current price of $151.92, the base case PE valuation puts YUM fair value near $138.88 per share. That figure assumes 4.5% yearly earnings growth, a target PE multiple of 31x, and a 10% discount rate.
Intrinsic Value
$138.88
Margin of safety
-9.4%
Expected annual return
-1.8%
Base case assumptions: 4.5% annual earnings growth, 31x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the YUM PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Yum! Brands, Inc. respond.
Open PE Calculator for YUMCompany Overview
YUM! Brands, Inc. (YUM) is a leading global quick-service restaurant enterprise that focuses on the creation, management, and franchising of its restaurant concepts internationally. Its business is organized into four main divisions: KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill. The company operates establishments under these well-known brands, offering diverse food categories such as chicken, pizza, Mexican-style dishes, and made-to-order chargrilled burgers and sandwiches, among other food products. As of December 31, 2021, YUM! Brands boasted a significant worldwide presence, comprising 26,934 KFC outlets, 18,381 Pizza Hut locations, 7,791 Taco Bell restaurants, and 318 The Habit Burger Grill units, spread across roughly 157 countries and territories. The company, which maintains its headquarters in Louisville, Kentucky, was established in 1997. It was formerly known as TRICON Global Restaurants, Inc., before officially adopting the name YUM! Brands, Inc. in May 2002.
Financial Metrics — YUM PE Stock Valuation Data
PE Ratio (TTM)
30.9x
PEG Ratio
n/m
Earnings Yield
3.23%
ROE (TTM)
-18.3%
Revenue/Share (TTM)
$23.60
Dividend Yield
1.92%
Debt/Equity
n/m
Frequently Asked Questions
What is the PE ratio of YUM?
The trailing twelve-month PE ratio of YUM reflects how much investors pay per dollar of Yum! Brands, Inc.'s earnings. This metric is most useful when compared to Restaurants peers and the company's own historical range.
Is YUM overvalued based on PE ratio?
YUM's PE of 30.9x combined with a PEG ratio of -7.91 provides a growth-adjusted perspective. YUM has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Restaurants, a DCF analysis may be more appropriate.
How do I value YUM stock using PE ratio?
To value Yum! Brands, Inc. using PE: (1) Compare the current PE (30.9x) against the Restaurants median to assess relative pricing, (2) check the PEG ratio (-7.91) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of YUM?
YUM's PEG ratio is -7.91, calculated by dividing the PE ratio (30.9x) by the expected earnings growth rate. Because YUM has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for YUM stock valuation?
PE ratio gives a quick relative read — how YUM is priced versus Restaurants peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See YUM DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value YUM with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.