Pro Analysis

Buy Yum Brands because of its partnership with GrubHub: Analyst 

A Taco Bell restaurant in Laguna Beach, California.
Scott Mlyn | CNBC
A Taco Bell restaurant in Laguna Beach, California.

Yum Brands shares will rise as it benefits from its close relationship with online ordering company GrubHub, according to one Wall Street firm.

BTIG raised its rating to buy from neutral for Yum Brands shares, predicting the owner of KFC and Taco Bell will generate earnings above expectations next year.

“We are upgrading shares of Yum! Brands … given the stock’s recent weakness, favorable risk/reward outlook and expected benefits from its recent investment in GrubHub,” analyst Peter Saleh said in a note to clients Wednesday. “We believe Yum!’s investment will give the company a competitive advantage over many of its peers by providing more insight and customer-level data than that available to other restaurants.”

In February, Yum Brands announced a partnership and $200 million investment in GrubHub.