Price Forecast:

Bullish Case: Bullish sentiment is reinforced by the effective integration of AI, which could drive sales growth and enhance customer loyalty, especially in underserved markets. Recent promotions, like Taco Bell's nostalgic menu, could spur customer engagement.

Bearish Case: A potential bearish outlook arises from ongoing E. coli concerns affecting brand reputation and competition pressures. Recent financial results falling short of expectations indicate weakness, posing a risk to share price stability.

Potential Outcomes:

• 60% Probability: Successful AI implementation leads to revenue boost.
• 25% Probability: E. coli concerns hurt brand reputation, adversely affecting sales.
• 15% Probability: Increased competition in fast food limits growth, leading to price stagnation.

Trading Oracle: Engage in a bullish strategy by selling YUM December 20, 2024 $130 puts and buying $125 puts. This credit spread exploits current low implied volatility (19.7%) while aligning with positive performance forecasts. High probability of profit on implied market strength and reduced downside risk from historical support around current price levels.

November 22, 2024