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Yum! Brands has KFC, Pizza Hut, and Taco Bell.
David Silverman / Getty Images
Wednesday,
Yum! Marcas
(YUM) has announced the acquisition of Tictuk ‘s omnichannel ordering and marketing platform. Evercore ISI likes the move, arguing that owner KFC, Pizza Hut, and Taco Bell are making significant strides in technology investment that will serve the industry in the long run.
Analyst David Palmer reiterated Outperform’s rating and $ 125 price target on Yum stock (YUM ticker) on Thursday, arguing that Tictuk allows consumers to order from its restaurants across a broad spectrum of social media and chat channels. Furthermore, he writes, “technology is closely integrated with existing point-of-sale and payment systems and works for all types of customer engagement. including delivery, pavement construction and indoor meals. ”
In this way, Yum takes a cue from
McDonald’s
(MCD) success in increasing digital interaction with customers. “Ultimately we are looking at these initiatives as a low risk bet, an additional high bet
Yum! Marcas
“The benefit of scale,” Palmer writes, adding that “the benefits of tomorrow will go to the restaurant companies that have a high-quality digital relationship with the consumer.”
Such investments can help offset higher wage pressures, as starting salaries move toward the $ 15-per-hour mark despite legislation stopping the federal minimum wage increase. . Moreover, Palmer writes, it comes at a time when Yum is already making smart moves, as evidenced by the company’s $ 17 billion in digital sales in 2020, a leap of 45% year over year.
The build links to some of these online endeavors. The company recently announced a new e-commerce platform for KFC, and has made other improvements for their Pizza Hut and Taco Bell brands as well. “We believe that these technical capabilities will be particularly valuable overseas, where the competitive set does not have the balance, intellectual property or resources to compete in a growing world. demand and outsourcing, ”Palmer notes.
Yum is down 0.3%, at $ 106.76, in recent trading, while the
S&P 500
is smooth. The shares have lost 1.7% year to date, although they are up nearly 41% in the last 12 months.
Write to Teresa Rivas at [email protected]