Morgan Stanley prefers KFC parent Yum Brands among fast-food players on growth prospects
BUZZ-Morgan Stanley prefers KFC parent Yum Brands among fast-food players on growth prospects ** Morgan Stanley picks Yum Brands YUM.N as favored stock among fast-food players, but downgrades Chipotle Mexican Grill CMG.N on moderating growth prospects
** YUM shares jump 2% in morning trading after brokerage upgrades to "overweight" from "equal-weight", hikes PT to $185 from $180
** "We think YUM trades below where it should based on growth profile and business features vs franchised QSR peers," analyst Brian Harbour says
** Brokerage sees Taco Bell and KFC as key drivers, offering leading brand exposure in global market and says co is better suited to the current macroeconomic environment
** Morgan Stanley sees value-seeking consumer behavior to continue against a backdrop of persistent inflation and spike in fuel costs tied to geopolitical conflicts
** Shares of CMG down ~3% after brokerage downgrades stock to "equal-weight" from "overweight", citing slower-than-expected sales and margin recovery after a muted 2025
** Cuts PT to $37 from $49, expects energy inflation to hit CMG more than YUM as a franchiser
** Brokerage sees risk to margins from cost inflation and lower sales leverage, hurt by modest traffic growth
** In the most recent quarter, Yum beat quarterly results expectations, while Chipotle reported a surprise rise in sales
** So far, YUM stock down 3%, CMG down ~21% YTD
(Reporting by Koyena Das and Sanskriti Shekhar from Bengaluru)