Can Yum! Brands, Inc. (YUM) Really Double U.S. Taco Bell Sales by 2021?

According to a recent report from Nation’s Restaurant News, Yum! Brands, Inc. (NYSE:YUM) management just dished out some intriguing food for thought during their investor meetings last week.

More specifically, analysts from Robert W. Baird and Jefferies Group each issued bullish notes on Yum! Brands, Inc. (NYSE:YUM) stock after the company outlined plans to double last year’s $7 billion in domestic sales from the company’s Taco Bell subsidiary by 2021.

However, that begs two multibillion-dollar questions: First, is this kind of growth actually possible for Taco Bell here in the U.S.? Second (and more important for you), would investors be wise to buy Yum! stock now?

Source: Wikimedia Commons.

Given all the negative focus on Yum! Brands, Inc. (NYSE:YUM)’ KFC woes in China lately, it should come as no surprise that the company is spending some energy on honing its other brands until the international storm clouds pass.

At first glance, though, for Yum! Brands, Inc. (NYSE:YUM) to double Taco Bell sales in what appears to be a relatively mature market admittedly seems a tad overzealous. After all, Yum! already operates more than 5,700 Taco Bell locations in the United States, and all the company’s chains combined only pulled in a total of $13.63 billion in sales during all of 2012.

Is it realistic, then, to expect Yum! Brands, Inc. (NYSE:YUM) domestic Taco Bell sales alone to reach $14 billion in just eight short years?

Grow mas
As we take a few steps back to look at the bigger picture, however, this long-term goal is more realistic than you might think.

So what’s the master plan to find all this domestic growth?

First, the majority of the $7 billion increase should come by “growing average unit volumes with more menu items and more dayparts.” I suppose this makes sense when we remember that the chain can attribute much of its 6% comparable-store sales increase last quarter to its affordable new “Loaded Grillers” menu items, which were created to increase Taco Bell’s 1.2% share of the “afternoon snack” daypart.

Taco Bell Loaded Grillers. Source: TacoBell.com.

For all you morning people, Taco Bell will also be rolling out its new breakfast lineup nationwide by the end of next year. And believe me, my local Taco Bells participated in Yum! Brands, Inc. (NYSE:YUM)’s testing round for breakfast, and those early-morning lines were definitely impressive. If all goes as planned, then, Taco Bell may have a fighting chance at wresting away a significant chunk of the morning market share McDonald’s Corporation (NYSE:MCD) has so stubbornly held on to for years.