Yum shares jump after Goldman upgrades to 'Buy'

Yum Brands Inc. shares jumped 6 percent on Wednesday after a Goldman Sachs analyst upgraded the stock to "Buy" from "Neutral," based on a more positive outlook for the company's earning potential in the next year.

Shares rose $2.01, or 6 percent, to $35.35 in afternoon trading. Louisville, Ky.-based Yum operates the Taco Bell, Pizza Hut and KFC chains.

Analyst Steven Kron also raised a 12-month price target on the shares to $40 from $36.

"As compared to our prior view, we are more positive on the prospects for (Yum International) profit growth, an improving U.S. business and overall corporate margins," Kron wrote in a research report.

"We expect return on invested capital, the traditional driver of YUM's multiple, to build in 2010 and drive valuation with it," he said.