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Yum! Brands, Inc. (YUM)
Intrinsic Value (DCF)
Current$161.05
→
Intrinsic$50.29
-69%
$21.48$50.29$105.05
Market implies 29% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $161, the market prices in continued strong cash flow growth (29%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $21 → Bull $105. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $67 | $77 | $88 | $99 |
| 10% | $36 | $43 | $50 | $58 |
| 12% | $19 | $24 | $30 | $35 |
| 14% | $8 | $12 | $16 | $21 |
Bull Case
- Bull case ($105) with 10% growth, 9% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($21) implies 87% downside at 6% growth, 12% discount
- Price reflects 29% growth expectations vs 8% historical — high bar to clear
- Trading 69% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$1.55B
Year 2$1.67B
Year 3$1.80B
Year 4$1.95B
Year 5$2.10B
Terminal$30.96B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.43BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.