YUM
Pizza Hut might be headed for the exit
Yum! Brands is reportedly in exclusive talks to sell Pizza Hut to LongRange Capital, with the deal value pegged around $3.6 billion to $4.3 billion. That’s not just a housekeeping move — it could be a major portfolio cleanup for a company that’s been carrying Pizza Hut like an awkward college roommate for years.
Why investors are suddenly paying attention
If the sale goes through, Yum! could use the proceeds to knock its net long-term debt down from roughly $9.3 billion to about $5.3 billion. That would lower leverage to around 1.7x trailing EBITDA, which is the kind of financial makeover Wall Street loves because it gives management more room to breathe.
What could that breathing room look like?
- More buybacks
- Bigger dividends
- Room for acquisitions that actually fit the menu
The post-slice version of Yum!
The bullish argument here is pretty simple: without Pizza Hut in the mix, Yum!’s pro forma EBITDA is projected at about $2.8 billion, and the math supports a $173 price target. At around $147 a share, that implies nearly 18% upside — not exactly a moonshot, but enough to make portfolio managers perk up.
Big picture: sometimes the best way to grow is to stop dragging around the parts of the business that don’t fit anymore. If Yum! turns Pizza Hut into cash, investors may get a cleaner, leaner, and more shareholder-friendly company on the other side.