Wells Fargo analysts downgraded YUM! Brands (YUM) shares to Equal Weight from Overweight.
The price target is cut by $15 to $135 per share.
The previously bullish 2023 thesis, based on accelerating comps, units, and margins, has largely materialized, according to analysts.
Shares slipped 0.7% on the news.
Looking ahead to 2024, analysts flag a high bar, while recent checks indicate a slowdown. They also see fewer catalysts for the year.
Despite YUM's impressive long-term growth drivers, 2024 is expected to involve decelerating traffic, moderating price gains, and limited potential upside to YUM's 8% profit algorithm.
“We model '24E EPS as slightly sub-Street, owing in part to YUM's decision to pause buybacks (for debt paydown),” analysts said.
On the other hand, McDonald’s (NYSE:MCD) is highlighted as the sector’s top pick.