NEW YORK (TheStreet) -- Before Wednesday's market open, Yum! Brands (YUM) - Get Report stock price target was increased to $95 from $92 at Nomura, which maintained a "buy" rating on the fast-food chain operator.
The firm selected the Louisville, KY-based company's stock as the top pick in the large-cap restaurant sector.
"We believe YUM! Brands remains ripe for major change," Nomura analysts wrote in a note released this morning. "Of the many possibilities for such change, we note that Taco Bell should be divested."
Taco Bell generates most of its income in the U.S. and has little to no synergies with the company's other chains, Pizza Hut and KFC.
"[W]e believe YUM! Brands remains one of the most bloated restaurant companies -- which is a big opportunity for the creation of shareholder value, if and when the entities that make up YUM! Brands today are molded into one or more lean-and-mean future entities," analysts explained.
Shares of Yum! Brands are down 0.15% to $84.16 in early morning trading.
Separately, Yum! Brands has a "hold" rating and a letter grade of C+ at TheStreet Ratings because of the company's growth in earnings per share, notable return on equity and expanding profit margins, which offsets generally higher debt management risk and disappointing stock performance.
You can view the full analysis from the report here: YUM
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.