Buy Yum Brands on this dip for the multibillion dollar share buyback, analyst says

A worker serves sangria at a Taco Bell Cantina restaurant in Chicago, Illinois.
Getty Images

Investors should buy Yum Brands shares because the company's strong cash generation will allow it to boost shareholder capital return in the coming years, according to Evercore ISI.

The firm raised its rating on the restaurant company to outperform from inline.

"We are upgrading YUM … due to the recent pullback in the shares and solid visibility into multi-year earnings growth from factors like G&A [general and administrative] reductions and share repurchases that occur regardless of operating performance," analyst Matt McGinley wrote in a note to clients Thursday.

Yum Brands owns the franchising rights for Taco Bell, KFC and Pizza Hut restaurants in more than 135 countries. The firm's shares are down 7 percent since Feb. 15 through Thursday.

More In Pro News and Analysis

CNBC ProSantoli's Friday market notes: The inflation mini-panic subsides amid a broad rally for stocks
CNBC ProAs growth stocks struggle, Wall Street analysts say bet on these value names
CNBC ProCramer says investors are misguided on Disney, expects theme parks and movies will bounce