必胜客分售之评析：Yum! Brands Inc 的战略调整与投资影响

Price Target 170.00 USD YUM YUM to sell Pizza Hut to LongRange Capital and Yum China YUM announced that they have entered into definitive agreements to sell Pizza Hut for $2.7billion, with $1.5 billion to private equity firm LongRange Capital for the ex-China business and$1.2 billion to Yum China for the Mainland China operations. The transactions are expected toclose in 3Q26. In this note, we also provide some background on Pizza Hut’s decline, examinehow YUM fares without PH, and share what we learn from our callback with Management. We view this as the decisive portfolio action the market had been waiting for sincethe strategic review launched in November 2025, allowing YUM to reposition aroundtwo structurally faster-growing brands that deserve to be valued at a premium towhere Yum has historically traded. Pizza Hut’s systemwide sales and operating profit haveconsistently lagged Taco Bell and KFC, dragging the blended number for YUM lower (seelink). Post-transaction, with the drag from Pizza Hut out of the picture and an expanded sharebuyback program of $4B, we think the company will trade at a higher multiple reflective ofa higher growth company. We estimate that the transaction implies a ~8x EV/EBITDA forPH (and ~6x ex-China), which is at low end of our initial expectations but is likely reflectingthe additional investments that LongRange expects to make to stabilize the business —investments that YUM would have otherwise needed to undertake. Additionally, the currentestimated multiple does not include the potential upside for YUM from the $75 million earn-out if LongRange simply maintains Pizza Hut’s 2025 EBITDA at any point between 2027 and2030. Beyond buybacks, we think the freed capital and management bandwidth allows formore internal investment in the twin engines of KFC and TB, offsetting the short-termEPS dilution from the sale.Management has indicated that the focus is on opportunistichigh-ROI investments within the two brands and capital returns through share buybacksrather than acquiring a third brand to replace PH in the portfolio - at least in the near term.Importantly, management was confident that even though there will be some near-termdilution from selling PH, they expect the dilution to be offset with 1 year of EBIT growth. That said, we think there might be talent risk as Pizza Hut, within the broader YUMecosystem, has historically been a productive talent development engine. NotablePizza Hut alumni include Brian Niccol, Kevin Hochman, Bob Wright, Artie Starrs, CarlLoredo. We believe that without Pizza Hut, YUM loses a developmental pillar, which narrowsthe range of experiences available inside the system to cultivate the next generation ofoperators. Danilo Gargiulo+1 917 344 8475 danilo.gargiulo@bernsteinsg.com Investment Implications We maintain our Market-Perform rating and PT of $170. DETAILS WHAT WE LEARNED FROM OUR CALLBACK WITH MANAGEMENT •Strategic refocusing:Management reiterated that the transaction enables YUM to concentrate resources on KFCInternational and Taco Bell U.S., which it views as structurally stronger businesses. By removing Pizza Hut from the coreportfolio, the company can allocate both capital and managerial attention more effectively. •Short-term EPS dilution:The deal is initially dilutive to EPS due to the loss of Pizza Hut earnings. However, managementemphasized that this impact is modest and expected to be fully offset within roughly one year through EBIT growth.Importantly, the use of proceeds, particularly reinvestment in high-return opportunities and share repurchases, supports arelatively quick return to earnings accretion. •Capital allocation:Management signaled a clear preference to return capital to shareholders rather than pursue near-termacquisitions. The company has already increased its buyback authorization and accelerated repurchase activity, indicatingthat proceeds from the transaction will largely flow into share buybacks alongside selective reinvestment in KFC and TacoBell. M&A is not a current priority, with management favoring organic growth and capital returns. •G&A impact:Although YUM retains a portion of Pizza Hut’s G&A costs, these are fully offset by transitional serviceagreement (TSA) income, under which YUM provides operational support (e.g., technology, finance) to the buyer. Most G&Atransfers at closing, and the retained portion carries no net cost during the TSA period, which extends through 2027. •Valuation:Management emphasized that the implied multiples do not fully capture the economic context, as they alsoreflect they reflect the incremental investment, time, and execution risk that the new owner (LongRange) will need toundertake to stabilize and grow the business - investments that YUM would otherwise have been required to fund if it hadretained the asset. Additionally, the transaction includes a $75 million earnout tied to maintaining EBITDA levels, whichprovides incremental upside beyond the headline con