Yum Earnings: Digital Strength and Value Orientation Should Defend Results Despite Tough Backdrop

Wide-moat Yum Brands reported third-quarter earnings roughly in line with our forecasts, and we came away encouraged by the firm's positioning against a tough restaurant industry backdrop. With nothing emerging from the report that changes our long-term expectations for mid-single-digit annual growth in sales, high-single-digit annual growth in operating profit, and low-double-digit growth in diluted EPS, we expect little change to our $139 fair value estimate and continue to view shares as attractive. We’re also lowering our Uncertainty Rating to Low from Medium for the name, consistent with our quantitative methodology.