Pizza Hut's Final Delivery...a $2.7B Check; Planned Divestiture Caps Strategic Review Process and Eventful Step Forward - Remain Neutral

Research evidence excerpt

Pizza Hut's Final Delivery...a $2.7B Check; Planned Divestiture Caps Strategic Review Process and Eventful Step Forward - Remain Neutral

June 16, 2026 Yum! Brands, Inc.

(YUM, Neutral)

Peter Saleh

Pizza Hut's Final Delivery...a $2.7B Check; Planned Divestiture Caps (212) 527-3567 psaleh@btig.com

Strategic Review Process and Eventful Step Forward - Remain Neutral Ben Parente, CFARESTAURANTS (212) 588-6557 bparente@btig.com

WHAT YOU SHOULD KNOW: Yum! Brands announced the sale of Pizza Hut this morning Company Data

for $2.7B in a two-part transaction, capping a review of strategic alternatives for the Closing Price $154.67

brand that started in November. The sale is expected to generate $2.3B of after-tax

Price Target - proceeds, likely deployed to share repurchase, and close in the third quarter. The saleEQUITY Market Cap (M) $42,630.30 price is a bit higher than we would have estimated, coming at ~7.5x EBITDA and about

9.0x EBITDA when fully burdened with corporate G&A costs (per our estimate, detailed Enterprise Value (M) $54,241.93

below). Our thoughts on both companies are incrementally positive today as the sale Shares Out (M) 275.62

is an eventful step forward, but not enough to change our broader thoughts. For Yum Avg Daily Vol-3 Months (M) 1.83

Brands, the sale removes a lagging brand, improves the financial profile and optimizes Dividend / Yield $3.00 / 1.9%

their resource allocation, but is also dilutive to operating profit and removes themRESEARCH Revisions from a large, global category (pizza). For Pizza Hut, the valuation is a bit higher than we

expected and going private could enable a more drastic turnaround effort, but the track Previous Current

record of similar deals isn't great, the China separation is a complication we haven't Rating Neutral Neutral