Based on the provided data and recent market activity, here's a comprehensive analysis of YUM's valuation:
Technical Analysis
The stock is showing signs of being overbought with RSI(14) at 74.55 and Stochastic RSI at 86.63. The price is currently trading above all major moving averages (5,10,20,60,200-day), indicating strong upward momentum but potential for a pullback.
Valuation Metrics
The current valuation metrics suggest YUM is overvalued:
- P/E (2023): 23.32x, down from 28.03x in 2022
- EV/EBITDA (2023): 18.58x, down from 20.34x in 2022
- P/S (2023): 5.26x, slightly down from 5.43x in 2022
Financial Performance
Revenue and profitability metrics show moderate growth:
- Revenue increased 3.4% YoY to $7.08B in 2023
- Net income grew 20.5% YoY to $1.60B
- Net margin improved to 22.57% from 19.37%
- Gross margin increased to 49.41% from 48.33%
Recent Developments
According to recent reports, YUM reported strong Q4 results with:
- 16% revenue increase YoY
- 28% adjusted EPS growth
- 8% increase in worldwide system sales
- 5% net new unit growth
- 6% dividend increase to $0.71 per share
Analyst Consensus
Wall Street maintains a "Moderate Buy" rating with:
- 6 "Strong Buy" ratings
- 21 "Hold" ratings
- Mean price target: $143.94 (below current price)
- Street-high target: $162 (10.5% upside potential)
Conclusion
YUM appears overvalued at current levels due to:
- Elevated technical indicators suggesting overbought conditions
- Premium valuation multiples compared to historical averages
- Current price trading above mean analyst target
- Recent strong rally (+9.3% YTD) may have priced in positive developments