Yum! Brands (YUM) has impressive same-store sales, potential for higher average unit volume, improved restaurant margins and international expansion, Oppenheimer said in a note emailed Wednesday.
The firm said that Taco Bell's financial growth remains impressive with Q1 same-store sales growth to outpace market expectations. The company is aiming to reach 10,000 locations in the US by 2030.
Taco Bell's growth strategy includes a more aggressive plans this year, capitalizing on new dining occasions, accelerating digital initiatives, among others, according to the note.
Oppenheimer said that digital innovation provides a significant competitive advantage to Yum! Brands and its plan to boost Taco Bell's digital sales mix to over 60% by 2030 from 35% currently is expected to enhance margins substantially.
The brokerage raised its price target for Yum! Brands to $185 from $160 and reiterated its outperform rating.
Price: 160.10, Change: +1.69, Percent Change: +1.07
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